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Measuring production efficiency of acute hospitals in Scotland, 1991-94: validity issues in data envelopment analysis

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  • David Parkin
  • Bruce Hollingsworth

Abstract

Data Envelopment Analysis is a potentially useful technique for measuring production efficiency and is being increasingly applied to health care services, as with other areas. However, some fundamental concerns need to be addressed before Data Envelopment Analysis can be accepted widely as a routine tool. These include issues of validity and specification error. This paper suggests a broad framework for assessing validity, which should be developed further, and gives illustrative examples of the problems in a real application within health care. Data from 75 Scottish acute hospitals for three years from 1991-94 are analysed. Internal validity is assessed by examining the effect on the results obtained of the choice of inputs and outputs selected for analysis. External validity is assessed by examining differences in the results obtained from the data for each of the three years. In both cases, it is concluded that there is a disturbing lack of concordance between the different results obtained. Caution must therefore be exercised in using Data EnvelopmentAnalysis in the health sector and in looking at its results, particularly those from a single time period.

Suggested Citation

  • David Parkin & Bruce Hollingsworth, 1997. "Measuring production efficiency of acute hospitals in Scotland, 1991-94: validity issues in data envelopment analysis," Applied Economics, Taylor & Francis Journals, vol. 29(11), pages 1425-1433.
  • Handle: RePEc:taf:applec:v:29:y:1997:i:11:p:1425-1433
    DOI: 10.1080/000368497326255
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    References listed on IDEAS

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    1. Fried, Harold O. & Lovell, C. A. Knox & Schmidt, Shelton S. (ed.), 1993. "The Measurement of Productive Efficiency: Techniques and Applications," OUP Catalogue, Oxford University Press, number 9780195072181.
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    Cited by:

    1. Carlos Pestana Barros & António Gomes de Menezes & José Cabral Vieira, 2013. "Measurement of hospital efficiency, using a latent class stochastic frontier model," Applied Economics, Taylor & Francis Journals, vol. 45(1), pages 47-54, January.
    2. Duen-Yian Yeh & Ching-Hsue Cheng, 2016. "Performance Management of Taiwan’s National Hospitals," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 15(01), pages 187-213, January.
    3. Kao, Ling-Jing & Lu, Chi-Jie & Chiu, Chih-Chou, 2011. "Efficiency measurement using independent component analysis and data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 210(2), pages 310-317, April.
    4. Jonathan Cowie & Darinka Asenova, 1999. "Organisation form, scale effects and efficiency in the British bus industry," Transportation, Springer, vol. 26(3), pages 231-248, August.
    5. N. Maniadakis & N. Kotsopoulos & P. Prezerakos & J. Yfantopoulos, 2009. "Health Care Services Performance Measurement: Theory, Methods and Empirical Evidence," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 151-170.
    6. Johnston, Katharine & Gerard, Karen, 2001. "Assessing efficiency in the UK breast screening programme: does size of screening unit make a difference?," Health Policy, Elsevier, vol. 56(1), pages 21-32, April.
    7. repec:pal:jorsoc:v:58:y:2007:i:9:d:10.1057_palgrave.jors.2602247 is not listed on IDEAS
    8. O'Neill, Liam & Rauner, Marion & Heidenberger, Kurt & Kraus, Markus, 2008. "A cross-national comparison and taxonomy of DEA-based hospital efficiency studies," Socio-Economic Planning Sciences, Elsevier, vol. 42(3), pages 158-189, September.
    9. Brenda Gannon, 2005. "Testing for Variation in Technical Efficiency of Hospitals in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 36(3), pages 273-294.
    10. Pompei, Fabrizio, 2013. "Efficiency And Productivity Growth Across The Italian Regions: The Regional Divide Revisited," MPRA Paper 52052, University Library of Munich, Germany.
    11. Kontodimopoulos, Nick & Niakas, Dimitris, 2005. "Efficiency measurement of hemodialysis units in Greece with data envelopment analysis," Health Policy, Elsevier, vol. 71(2), pages 195-204, February.
    12. repec:spr:hecrev:v:8:y:2018:i:1:d:10.1186_s13561-018-0191-9 is not listed on IDEAS
    13. Sagarra, Marti & Mar-Molinero, Cecilio & Agasisti, Tommaso, 2017. "Exploring the efficiency of Mexican universities: Integrating Data Envelopment Analysis and Multidimensional Scaling," Omega, Elsevier, vol. 67(C), pages 123-133.
    14. Gannon, Brenda, 2004. "Technical Efficiency of Hospitals in Ireland," Papers HRBWP18, Economic and Social Research Institute (ESRI).
    15. Sepehrdoust Hamid, 2010. "Efficiency Measurement of Housing Sector in Iran," Asian Journal of Law and Economics, De Gruyter, vol. 1(2), pages 1-21, December.
    16. Varabyova, Yauheniya & Müller, Julia-Maria, 2016. "The efficiency of health care production in OECD countries: A systematic review and meta-analysis of cross-country comparisons," Health Policy, Elsevier, vol. 120(3), pages 252-263.
    17. Kim-Huong Nguyen & Tim Coelli, 2009. "Quantifying the effects of modelling choices on hospital efficiency measures: A meta-regression analysis," CEPA Working Papers Series WP072009, School of Economics, University of Queensland, Australia.
    18. N. Maniadakis & N. Kotsopoulos & P. Prezerakos & J. Yfantopoulos, 2008. "Measuring Intra-Hospital Clinic Efficiency and Productivity: Application to a Greek University General Hospital," European Research Studies Journal, European Research Studies Journal, vol. 0(1-2), pages 95-110.
    19. Varabyova, Yauheniya & Schreyögg, Jonas, 2013. "International comparisons of the technical efficiency of the hospital sector: Panel data analysis of OECD countries using parametric and non-parametric approaches," Health Policy, Elsevier, vol. 112(1), pages 70-79.
    20. repec:pal:jorsoc:v:60:y:2009:i:11:d:10.1057_jors.2009.32 is not listed on IDEAS
    21. Donal. G. McKillop & J. Colin Glass & Christine A. Kerr & Gillian McCallion, 1999. "Efficiency in Northern Ireland Hospitals - A Non-parametric Analysis," The Economic and Social Review, Economic and Social Studies, vol. 30(2), pages 175-196.
    22. Alexandre Marinho & Simone de Souza Cardoso & Vivian Vicente de Almeida, 2009. "Brasil e OCDE: Avaliação da Eficiência em Sistemas de Saúde," Discussion Papers 1370, Instituto de Pesquisa Econômica Aplicada - IPEA.

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