Efficiency measurement using econometric stochastic frontier analysis (SFA) method, Case study: hospitals of Kermanshah University of Medical Sciences

Reza Goudarzi, Nader RjabiGilan, Seyed Ramin Ghasemi, Sohyla Reshadat, Rouhollah Askari, Mohammad Ahmadian

Abstract


Background: Full consideration of the performance and efficiency of hospital costs necessitates the application of   economic analysis techniques. The aim of this study was to assess the efficiency of hospitals in Kermanshah University of Medical Sciences through Stochastic Frontier Analysis (SFA) method.

Methods: The performance of Kermanshah hospitals (n=7) was assessed and analyzed by Stochastic Frontier Analysis (SFA) method during 2005-2011. Inpatient admission was considered as the output variable, while the number of medical doctors, nursing staff other personnel, active beds and outpatient admission were considered as the input variables. Frontier 4.1 software was used to analyze the data.

Results: Based on the results of performance evaluation using Cobb-Douglas production function, the mean efficiency score of the hospitals in the SFA method was 0.63. Also, the efficiency capacity in these hospitals could be promoted up to 37 percent.

Conclusion: Based on the results of Stochastic Frontier Analysis, downsizing the manpower in hospitals plays a major role in reducing hospital costs and improving their performance. Finally, it is necessary to investigate the effect of factors such as quality of service and patient satisfaction on hospital performance.


Keywords


Efficiency measurement, econometrics, Stochastic Frontier Analysis, hospital

References


Keshtkaran M. [An economic analysis of health care delivery system (Persian)] MSc thesis in economic. Tehran: Tarbiat Modarres University1994;27-8.

Sadaghiani E. [Evaluation of health care and hospital standards (Persian)]. 1st ed. Tehran: Moein pub. 1997;40-53.

Meybodi Emami A. [Principles of measuring performance and productivity: practical application (Persian)]. 2st ed. Tehran: Publishing Business Studies and Research Institute. 2005;10-15.

Hajizadeh M, Luke B. Equity of health care financing in Iran. Munich Personal RePEc Archive [serial online] 2010 March; 14672 [51 screen]. Available at: URL: http://mpra.ub.uni-muenchen.de/14672/ [cited: may 12 2013].

Moradi Shahr B. [To determine the economic efficiency and risk factors of potato production in Kerman province(Persian)]. Fifth Biennial Conference of Agricultural Economics; Zahedan: University of Sistan and Baluchestan. 2005.

Peacock S, Chan C, Mangolini M, Johansen D. Techniques for measuring efficiency in health services. 2st ed. Productivity Commission Staff. 2001; 9-11.

Gannon B. Testing for variation in technical efficiency of hospitals in Ireland. The Economic and Social Review. 2005;36(3):273-94.

Mortimer D, Peacock S. Hospital efficiency measurement: simple ratios vs frontier methods. Centre for Health Program Evaluation [serial online] 2002 August; 135 [21 screen]. Available at: URL: www.buseco.monash.edu.au/centres/che/pubs/wp135.pdf [cited: may 12 2013].

Farzianpour F, Hosseini S, Amali T, Hosseini S, Hosseini SS. The evaluation of relative efficiency of teaching hospitals. American Journal of Applied Sciences. 2012;9(3):392-8.

Hatam N, Pourmohammadi K, Bastani P, Javanbakht M. Using parametric methods in hospital efficiency measurement: a case study in hospitals affiliated to social security and welfare ministry. Razi Journal of Medical Sciences. 2013;20(110):29-36.

Ozcan YA, Luke RD, Haksever C. Ownership and organizational performance: a comparison of technical efficiency across hospital types. Med Care. 1992; 30(9):781-94.

Hofmarcher MM, Paterson I, Riedel M. Measuring hospital efficiency in Austria: a DEA approach. Health Care Manag Sci. 2002;5(1):7-14.

Sahin I, OzcanY. Public sector hospital efficiency for provincial markets in Turkey. J Med Syst. 2000; 24(6):307-20.

Chang H, Chang WJ, Das SL. Health care regulation and the operating efficiency of hospitals: Evidence from Taiwan. J Account Public Pol. 2004;23(6):483-510.

Greene WH. Econometric Analysis. 3st ed. New York: Prentice Hall. 2005; 21-34.

Abedifar P, Khataei M. [Estimation of technical efficiency in the banking industry (Persian)]. Journal of Iran Economic Research. 2000;2(6): 63-84.

Ludwig M. Efficiency of Dutch hospitals: PhD thesis in health economy. Maastricht: Tilburg Institute of Advanced Studies, University of Maastricht. 2008; 60-63.

Hadian M, Gohari M, Yousefi M. [Estimate the production function in the hospitals of Urmia University of Medical Sciences (Persian)]. Health Management Quarterly. 2007;10(29):7-14.

Rezapour A, Asefzadeh S. [Estimate the production function in teaching hospital of Qazvin University of Medical Sciences during 1998-2004 (Persian)]. Journal of Qazvin University of Medical Sciences. 2006;10(3):86-90.

Hajialiafzali H, Moss JR, Mahmood MA. Efficiency measurement for hospitals owned by the Iranian social security organisation. J Med Syst. 2007;31:166–72.




DOI: http://dx.doi.org/10.22110/jkums.v17i10.911

Refbacks

  • There are currently no refbacks.


Copyright (c)

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.