Data Envelopment Analysis Comparison of Hospital Efficiency and Quality

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Abstract

Using a sample of Virginia hospitals, performance measures of quality were examined as they related to technical efficiency. Efficiency scores for the study hospitals were computed using Data Envelopment Analysis (DEA). The study found that the technically efficient hospitals were performing well as far as quality measures were concerned. Some of the technically inefficient hospitals were also performing well with respect to quality. DEA can be used to benchmark both dimensions of hospital performance: technical efficiency and quality. The results have policy implications in view of growing concern that hospitals may be improving their efficiency at the expense of quality.

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Measuring hospital cost efficiency with panel data models.

M Linna (1998)

This paper investigated the development of hospital cost efficiency and productivity in Finland in 1988-1994 using a comparative application of parametric and non-parametric panel models. Stochastic cost frontier models with a time-varying inefficiency component were used as parametric methods. As non-parametric methods various DEA models were employed to calculate efficiency scores and the Malmquist productivity index. The results revealed a 3-5% annual average increase in productivity, half of which was due to improvement in cost efficiency and half due to technological change. The results by parametric and non-parametric methods compared well with respect to individual efficiency scores, time-varying efficiency and technological change. The state subsidy reform of 1993 did not seem to have any observable effects on the hospital efficiency.