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Evaluating Hospital Efficiency Adjusting for Quality Indicators: an Application to Portuguese NHS Hospitals

Author

Listed:
  • : Álvaro Almeida

    (CEF.UP, Faculdade de Economia, Universidade do Porto)

  • José Pedro Fique

    (Faculdade de Economia, Universidade do Porto)

Abstract

The objective of this paper is to develop a methodology to incorporate measures of hospital quality in efficiency analysis, applied to Portuguese NHS hospitals, in order to assess whether there is a trade-off between efficiency and quality in Portuguese hospitals. We develop and compare two methodologies to compute DEA technical efficiency scores adjusted for output quality, for a sample of Portuguese NHS hospitals in 2009. When DEA efficiency scores are adjusted for output quality, the decision making units that lie on the technical efficiency frontier remain largely unaltered, even if a great weight is given to quality indicators over quantity indicators of output. Nevertheless, we find that outside of the frontier adjusting for quality does have an impact in efficiency scores.We conclude that the empirical evidence is not sufficient to identify a clear trade-off between efficiency and quality in the hospitals under review, implying the possibility that efficiency gains may achieved without a significant sacrifice of service quality. Nevertheless, there is enough evidence to conclude that analyzing hospital efficiency without consideration of differences in quality of service will generate biased results. When perceived quality is brought to the analysis, the gap between efficient and inefficient units tends to widen.

Suggested Citation

  • : Álvaro Almeida & José Pedro Fique, 2011. "Evaluating Hospital Efficiency Adjusting for Quality Indicators: an Application to Portuguese NHS Hospitals," FEP Working Papers 435, Universidade do Porto, Faculdade de Economia do Porto.
    • Handle: RePEc:por:fepwps:435
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    References listed on IDEAS

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    Cited by:

    1. Richard Kališ, 2018. "Technical efficiency of Slovak general hospitals," Department of Economic Policy Working Paper Series 012, Department of Economic Policy, Faculty of National Economy, University of Economics in Bratislava.

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    More about this item

    Keywords

    Hospital efficiency; Hospital quality; Data Envelopment Analysis;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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