Measuring the Effect of Size on Technical Efficiency of the United Arab Emirates Hospitals

Abstract

<p><strong>OBJECTIVE:</strong> The main purpose of this study is to estimate the technical efficiency of the United Arab Emirates (UAE) hospitals and examine the effect of hospital size on estimated technical efficiency scores.</p><p><strong>METHODS: </strong>Using 2012 data from Ministry of Health, Dubai Health Authority, and Health Authority in Abu Dhabi,<strong> </strong>we employed a nonparametric method, data envelopment analysis (DEA), to estimate the technical efficiency of 96 private and governmental hospitals in the UAE. Efficiency scores are calculated using both Banker, Charnes, and Cooper (BCC) and Charnes, Cooper, and Rhodes (CCR) models. </p><p><strong>RESULTS: </strong>The average technical efficiency of the UAE hospitals is estimated at 59% based on the BBC model and at 48% based on the CCR model. The optimal size of a hospital in the UAE is between 100 to 300 beds. We also found evidence of economies of scope between the provision of outpatient and inpatient care in the UAE hospitals.</p><p><strong>CONCLUSION: </strong>Our findings indicate that only one third of the UAE hospitals are technically efficient. There is evidence to suggest that there are considerable efficiency gains yet to be made by many UAE hospitals. Additional empirical research is needed to inform future health policies aimed at improving both the technical and allocative efficiency of hospital services in the UAE. </p>