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 input and 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; especially for public hospitals low total efficiency scores can be mainly explained by past policy-makers’ decisions on the size of the hospitals or their role within the regional health care service. Finally, non-profit private hospitals exhibit a higher total inefficiency while both non-profit and for-profit hospitals are characterised by higher levels of scale inefficiency than public ones.
|Date of creation:||2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.unive.it/dip.economia
More information through EDIRC
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.:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
When requesting a correction, please mention this item's handle: RePEc:ven:wpaper:2006_13. 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: (Geraldine Ludbrook)
If references are entirely missing, you can add them using this form.