Authors: Jeong Hoon Choi; Dong-Hyun Oh
Addresses: College of Business and Technology, University of Nebraska Kearney, West Center 405C, 1917 West 24th Street, Kearney, NE, 68849-4430, USA ' Department of Industrial Engineering, Inha University, Incheon, Korea
Abstract: This research compares the efficiency of US teaching and non-teaching hospitals as estimated by using data envelopment analysis. Labour costs, capital costs and other operating expenses are employed as input variables. The research models are divided into two main cases based on different sets of outputs. In both cases, teaching hospitals show higher efficiency scores than non-teaching hospitals. For-profit hospitals show higher efficiency scores than not-for-profit or governmental hospitals. With regard to the size, larger hospitals are associated with higher efficiency scores. Regional variations are detected, but they seem to fade in comparing some regions. This paper addresses the economically important question of what explains heterogeneity in production functions across hospitals by measuring the efficiency of hospitals, including quality variables. The inclusion of quality metrics in efficiency estimates represents an improvement over similar existing studies, since patient outcomes are key to considering welfare implications in the healthcare sector.
Keywords: data envelopment analysis; DEA; hospital efficiency; quality indicators; healthcare industry.
International Journal of Business and Systems Research, 2018 Vol.12 No.2, pp.162 - 180
Received: 02 Mar 2016
Accepted: 08 Oct 2016
Published online: 27 Mar 2018 *