Abstract
This study examines the relative technical efficiency of 12 hospitals in Eastern Ethiopia. Using six-year-round panel data for the period between 2007/08 and 2012/13, this study examines the technical efficiency, total factor productivity, and determinants of the technical inefficiency of hospitals. Data envelopment analysis (DEA) and DEA- based Malmquist productivity index used to estimate relative technical efficiency, scale efficiency, and total factor productivity index of hospitals. Tobit model used to examine the determinants of the technical inefficiency of hospitals. The DEA Variable Returns to Scale (VRS) estimate indicated that 6 (50%), 5 (42%), 3 (25%), 3 (25%), 4 (33%), and 3 (25%) of the hospitals were technically inefficient while 9 (75%), 9 (75%), 7 (58%), 7 (58%), 7 (58%) and 8 (67%) of hospitals were scale inefficient between 2007/08 and 2012/13, respectively. On average, Malmquist Total Factor Productivity (MTFP) of the hospitals decreased by 3.6% over the panel period. The Tobit model shows that teaching hospital is less efficiency than other hospitals. The Tobit regression model further shows that medical doctor to total staff ratio, the proportion of outpatient visit to inpatient days, and the proportion of inpatients treated per medical doctor were negatively related with technical inefficiency of hospitals. Hence, policy interventions that help utilize excess capacity of hospitals, increase doctor to other staff ratio, and standardize number of inpatients treated per doctor would contribute to the improvement of the technical efficiency of hospitals.
Highlights
The health care system of many countries in Sub-Saharan Africa including Ethiopia faces resource constraints to provide quality health services to the people
Even though the percentage vary from country to country, hospitals in Sub-Saharan African countries consume a larger proportion of public health care resources
Hospital efficiency was increased by 1.2%, technical change decreased by 4.7%
Summary
The health care system of many countries in Sub-Saharan Africa including Ethiopia faces resource constraints to provide quality health services to the people. Even though the percentage vary from country to country, hospitals in Sub-Saharan African countries consume a larger proportion of public health care resources. Few studies conducted the second stage analysis to examine the determinants of technical (in) efficiency using panel data. The second stage analysis involves converting the DEA efficiency score into inefficiency score and running regression against some factors In this regard, [9] analyzed technical efficiency and productivity in South Africa using panel data. Other study in Ethiopia is by [11] which used Stochastic Frontier Approach (SFA) to analysis the technical efficiency of 8 selected public hospitals. These few studies focused on the first stage of efficiency analysis. In the rest of the paper, methods and materials, result and discussions, and conclusion and recommendations are presented
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