Testing for Variation in Technical Efficiency of Hospitals in Ireland

Funding in Irish hospitals is partially based on case mix, whereby resources are redistributed annually to hospitals with greater efficiency. Accurate measurement of efficiency is essential, so in this paper, we use Data Envelopment Analysis and Stochastic Frontier Analysis to measure technical efficiency of acute public hospitals in Ireland between 1995 and 2000. The results provide estimates of average technical efficiency in the hospital sector in Ireland for the first time, and highlight the variation in technical efficiency levels across hospitals. Internationally, the results contribute to the growing literature on the comparison of DEA and SFA methodologies.

[1]  P. W. Wilson,et al.  Statistical Inference in Nonparametric Frontier Models: The State of the Art , 1999 .

[2]  A. U.S.,et al.  FORMULATION AND ESTIMATION OF STOCHASTIC FRONTIER PRODUCTION FUNCTION MODELS , 2001 .

[3]  P. Schmidt,et al.  Production frontiers with cross-sectional and time-series variation in efficiency levels , 1990 .

[4]  Gary D. Ferrier,et al.  Rural hospital performance and its correlates , 1996 .

[5]  A. U.S.,et al.  Measuring the efficiency of decision making units , 2003 .

[6]  D Parkin,et al.  The efficiency of Scottish acute hospitals: an application of data envelopment analysis. , 1995, IMA journal of mathematics applied in medicine and biology.

[7]  Chunyan Yu,et al.  The effects of exogenous variables in efficiency measurement - A monte carlo study , 1998, Eur. J. Oper. Res..

[8]  Timothy Coelli,et al.  An Introduction to Efficiency and Productivity Analysis , 1997 .

[9]  Boaz Golany,et al.  Foundations of data envelopment analysis for Pareto-Koopmans efficient empirical production functions , 1985 .

[10]  David Parkin,et al.  Measuring production efficiency of acute hospitals in Scotland, 1991-94: validity issues in data envelopment analysis , 1997 .

[11]  E. Biørn,et al.  The Effect of Activity-Based Financing on Hospital Efficiency: A Panel Data Analysis of DEA Efficiency Scores 1992–2000 , 2003, Health care management science.

[12]  R. Banker,et al.  A Monte Carlo comparison of two production frontier estimation methods: Corrected ordinary least squares and data envelopment analysis , 1993 .

[13]  S. Grosskopf,et al.  Measuring hospital performance. A non-parametric approach. , 1987, Journal of health economics.

[14]  Steven Johnson,et al.  Comparing Techniques for Measuring the Efficiency and Productivity of Australian Private Hospitals , 1998 .

[15]  M. Linna,et al.  Determinants of cost efficiency of Finnish hospitals: A comparison of DEA and SFA , 1999 .

[16]  J. Colin Glass,et al.  Efficiency in Northern Ireland hospitals: a non-parametric analysis , 1999 .

[17]  Sergio Perelman,et al.  A comparison of parametric and non-parametric distance functions: With application to European railways , 1999, Eur. J. Oper. Res..

[18]  B. Gannon.  Technical Efficiency of Hospitals in Ireland , 2004 .

[19]  P. Schmidt,et al.  Production Frontiers and Panel Data , 1984 .

[20]  R. Banker,et al.  A Comparative Application of Data Envelopment Analysis and Translog Methods: An Illustrative Study of Hospital Production , 1986 .

[21]  Abraham Charnes,et al.  Measuring the efficiency of decision making units , 1978 .

[22]  M. Farrell.  The Measurement of Productive Efficiency , 1957 .

[23]  G. Battese,et al.  Frontier production functions, technical efficiency and panel data: With application to paddy farmers in India , 1992 .

[24]  T. R. Nunamaker,et al.  Using data envelopment analysis to measure the efficiency of non‐profit organizations: A critical evaluation , 1985 .

[25]  J. Magnussen,et al.  Efficiency measurement and the operationalization of hospital production. , 1996, Health services research.

[26]  R. Rosenman,et al.  Output efficiency of health maintenance organizations in Florida. , 1997, Health economics.

[27]  A. Charnes,et al.  Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis , 1984 .

[28]  D. Aigner,et al.  P. Schmidt, 1977,?Formulation and estimation of stochastic frontier production function models,? , 1977 .