Measuring Hospital Efficiency through Data Envelopment Analysis when Policy-makers' Preferences Matter. An Application to a Sample of Italian NHS Hospitals
In this paper we show how both the choice of specific constraints on output weights (in accordance with health care policy-makers' preferences) and the consideration of exogenous variables outside the control of hospital management (and linked to past policy-makers' decisions) can affect the measurement of hospital technical efficiency using the "Data Envelopment Analysis" (DEA). Considering these issues, the DEA method is applied to measure the efficiency of 85 (public and private) hospitals in Veneto, a Northern region of Italy. The empirical analysis allows us to verify the role of weight restrictions and of demand in measuring the efficiency of hospitals operating within a National Health Service (NHS). We find that the imposition of a lower bound on the virtual weight of acute care discharges weighted by case-mix (in order to consider policy-maker objectives) reduces average hospital efficiency. Moreover, we show that, in many cases, low efficiency scores are attributable to external factors, which are not fully controlled by the hospital management. Finally, we show that accredited private hospitals exhibit a higher level of total inefficiency than public ones: for-profit hospitals are mostly characterised by scale inefficiency, while non-profit hospitals are affected by different sources of inefficiency. Most of the hospitals in Veneto are too small in relation to their output levels (i.e. are characterised by IRS) and this problem of scale inefficiency characterises mainly the accredited private hospitals. This result indicates that private hospitals are considered important within regional health care planning as providers of supplementary services integrating public supply, even though they operate at a sub-optimal scale.
Volume (Year): (2007)
Issue (Month): 3 ()
|Contact details of provider:|| |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- L. Steinmann & P. Zweifel, 2003. "On the (in)efficiency of Swiss hospitals," Applied Economics, Taylor & Francis Journals, vol. 35(3), pages 361-370.
- Liam O'Neill, 1998. "Multifactor efficiency in Data Envelopment Analysis with an application to urban hospitals," Health Care Management Science, Springer, vol. 1(1), pages 19-27, September.
- Bruce Hollingsworth & P.J. Dawson & N. Maniadakis, 1999. "Efficiency measurement of health care: a review of non‐parametric methods and applications," Health Care Management Science, Springer, vol. 2(3), pages 161-172, July.
- Juan Ventura & Eduardo GonzáLez & Ana Cárcaba, 2004. "Efficiency and Program-Contract Bargaining in Spanish Public Hospitals," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 75(4), pages 549-573, December.
- R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
- Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
- Rajiv D. Banker & Robert F. Conrad & Robert P. Strauss, 1986. "A Comparative Application of Data Envelopment Analysis and Translog Methods: An Illustrative Study of Hospital Production," Management Science, INFORMS, vol. 32(1), pages 30-44, January.
- Puig-Junoy, Jaume, 2000. "Partitioning input cost efficiency into its allocative and technical components: an empirical DEA application to hospitals," Socio-Economic Planning Sciences, Elsevier, vol. 34(3), pages 199-218, September.
When requesting a correction, please mention this item's handle: RePEc:mul:je8794:doi:10.1429/25710:y:2007:i:3:p:233-258. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.