Evaluating the decentralization of public hospitals in Turkey in terms of technical efficiency: data envelopment analysis and Malmquist index

Abstract

PurposeDecree Law No. 663 introduced a decentralized organizational structure and administration pertaining to Turkish public hospitals in November 2011. This study aims to explore the effects of the public hospital unions (PHUs), which were a result of Decree Law No. 663, on the efficiency and productivity of public hospitals.Design/methodology/approachData envelopment analysis (DEA) and DEA-based Malmquist total factor productivity (TFP) index were used from 2011 to 2016. Raw materials and supply expenses, salaries and fringe benefits, other service costs, general administrative expenses, total number of beds, number of specialists, number of residents, number of general practitioners, number of nurses and midwives and other medical officials were used as input variables. Working capital turnover, number of inpatients, number of outpatients and number of surgical operations for Groups A, B and C were used as output variables.FindingsAccording to the DEA scores, the percentage of efficient hospitals showed a declining trend from 2011 to 2016. The TFP results also showed a decreasing trend from 2011 to 2016.Practical implicationsProviding administrative and financial autonomy to public hospital managers may cause efficiency and productivity losses, which is contrary to expectations.Originality/valueThis study is the first to reveal the impact of decentralization of public healthcare providers on their performance levels in Turkey.