Evaluating Hospital Efficiency Using DEA-MI

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1 J. Basc. Appl. Sc. Res., 2(11) , , TextRoad Publcaton ISSN Journal of Basc and Appled Scentfc Research Evaluatng Hosptal Effcency Usng DEAMI Mohammad Mahd mozaffar 1, Amn Yazdan 2 1 Assstant Professor, Department of Industral Management, Imam Khomen Internatonal Unversty (IKIU), and Qazvn, Iran 2 Department of Industral Management, Imam Khomen Internatonal Unversty (IKIU), Qazvn, Iran ABSTRACT Hosptal effcency analyss and performance comparson among homogeneous frms provdes the feld of usng tools and economc ndcators n healthmedcal management, allocaton of resources and other manageral decsons. The am of ths research s measurngand dentfyng the productvty changes of some medcal unversty's publc. Ths research has done on the effcency of 27 hosptals, usng a combnaton of DEA and Malmqust ndex. Varable number of doctors, beds, nurses, paramedcal personnel, outpatents, surgcal patents, the mortalty of patents and hosptalzed days were used and data were extracted from annual reports data form health departments and analyzed wth EMS software. The fndngs show that the average productvty of total factors durng the perod was 1.11 and represented 11% reducton. The average of performance changes was and showed 4% reducton. The average of technology changes was 1.12 and represented 12% reducton. The average of qualtatve changes was and showed 5% mprovement n change's trend. KEYWORDS: productvty, hosptal, Malmqustndex, data envelopment analyss 1. INTRODUCTION Human needs are lmtless; however, sources that meet those are scarce. Scarce sources compel people to make the best of current sources and fnd new ones actualzng the economc growth. Provdng the productvty growth represents a country s most approprately usng of ts own resources. Wth the most approprate use of sources, ncrease n productvty wll be provded. Ths ncrease that occurs n productvty brngs about the economc growth as well. Increasng emphass s beng placed on measures of effcency n hosptals to compare ther relatve performance gven the need to ensure the best use of scarce resources.productvty n hosptals, as amajorcenter forhealthservces,hasalways been emphaszed.wth consderng developed countres, we can seedfferent methods are presented. It s worth to evaluate hosptals to dentfy whether they are standard or not, however, t s accuracy and sutablty of method and evaluatng crtera that makes the job more worthwhle. Durng the recent decade, health care system of most countres has faced wth a sgnfcant ncrease n health costs, especally hosptals. Ths s due to the hybrd mpact of factors related to supply and demand. Besdes these factors, studes show that the hgh costs s partly due to neffcent allocatng of resources (Yasawarng, 2002). The ncreasng trend of health servces costs n growng populaton persuades governments and health servce provders to draw more attenton to qualty and productvty of ther resources(malmqust, 1953; Shmshak et. al, 2009, Syam& Cote, 2010; changet. al,2011). However, effectve use of healthcare resources s an mportant goal to ncrease attenton to these servces. The optmum use of lmted resources s a major concern n health care management. Lack of health resources, partcularly n developng countres s one of the man obstacles n economc development competton and welfare (Aktas et al, 2007). The man goal of mprovng health servces should be to maxmze the customer's tranqulty conformng to qualty health servces (Bull, 1994). However, qualty s a complex term wththefnancal and resources constrants, ncrease n patents demand, frm'scost effcency consderaton regardng qualtatveapproaches (Kanj &sa, 2003). Hosptals n Iran also consume the more volume of GPD and health budget (Watcharasrroj& Tang, 2004) and the need to ensure the optmum use of lmted resources and mprove effcency n health servces requres some steps (allocated to ths part of health care system) to prevent or reduce wastng resources n order to provde more servces, develop access to hosptal servces and mprove ther qualty. One of the steps s to compare outputs and nputs n order to estmate the effcency and productvty of a hosptal (Jacobs, 2001). *Correspondng Author: Mohammad Mahd mozaffar, Assstant Professor, Department of Industral Management, Imam Khomen Internatonal Unversty (IKIU), and Qazvn, Iran, Emal: zafarnma@yahoo.com 11330

2 Mahd Mozaffar and Yazdan, 2012 Ths study wll develop a tool to measure hosptaleffcency by usng data envelopment analyss (DEA) and Malmqustproductvtychangendex 1.DEA s a nonparametrc method based on lnear programmng technque to evaluate the effcences of the analyzed unts. DEA can measure multple nputs and outputs, as well as evaluate the measures quanttatvely and qualtatvely, hence enablng managers to make reasonable judgment on the effcency of the analyzed unts. In ths paper, we propose a DEA model to evaluate the effcency n dfferent hosptals.also, Malmqustproductvtychange ndex s decomposed to qualtatve change, effcencychangeandtechncalchange (Fare et al, 1995). Specfcally, we nvestgate techncal effcency, purely techncal effcency, and scale effcency usng data envelopment analyss (DEA). In addton we utlze the Malmqust Index approach to measure the evaluaton of productvty and effcency of TEHRAN s hosptals over 2008 and LITERATURE REVIEW Measurngthe productvty has been appled to hosptals managementsnce1960. Generally,the bestwayto measurehosptalsproductvty s to measure ts outputand nput. Outputncludes number of hosptalzed cases, the number ofclearedcases, and the rate of rereferrals. Inputsnclude staff workng hours, food and medcal equpment (MedPAC, 1999). The World Health Report (WHR) (WHO, 2000a), and the Bulletn of the World Health Organzaton (WHO, 2000b), were devoted to the development and applcaton of a framework for assessng the performance of health systems. The framework ncludes measurement of three goals of health systems (health, responsveness and farness n fnancal contrbuton), and an exposton four functons of health systems (ncludng fnancng, provson, stewardshp and resource generaton) (Masye et. al, 2006). Margyt tested the mpact of fnancal mprovements n Australan hosptals on productvty between the years 1994 to 1998 n a research on fnancal practces. The result was a consderable postve change n technology from 1996 to Whle, there was no expected ncrease n technology effcency. Also, Mka analyzng the mpact of health care system's fnancal mprovements on the productvty of a hosptal n Fnland found the productvty changes durng the years 1994 to 1998 and suggested the state subsdy as a possble factor for hosptals effort n mprovng performance. Cheng et al. represented a productvty mprovement usng Malmqust ndex and DEA that was manly nfluenced by a qualty factor (Chang et al, 2011). The results of Sola and Pero s research (2001)ndcate a reducton n techncal changes and mprovement n both qualty and effcency changes. Pero came to a postve techncal change and a productvty mprovement n Lam O'Nell et al. revewed 79 surveys of the years 1984 to 2004 of 12 countres and found marked dfferences n specfcatons of varous studes both n a selectve DEA model and nputs and outputs groupng.ankaran et al. offered a model based on DEA n 2009 whch ncludes the relatons between decsonmakng process of hosptal s departments and techncal effcency. In 2010, Chng compared nputorented CCR and the relatve nputorented DEA model to assess the effcency of hosptals n a research and the results showed that usng ths model solves false neffcency n nputorented CCR model. Ab Swanson et al. tested the relatons between performance and electronc medcal records of hosptals n 2009 and they found there was nsuffcent proof of the effectveness of these reports on a hosptal performance. Many studes have used the Malmqust productvty ndex to measure effcency and technologcal change of hosptal servces. Usng an nputbased MPI, SommersgutterRechmann (2000), studed changes n productvty n the provson of hosptal care n Austra between 1994 and The author found a consderable postve shft n hosptal technology between 1996 and 1998 wth no enhancement n techncal effcency due to the ntroducton of an actvtybased hosptal fnancng system. Burgess and Wlson (1995), examned U.S. hosptals from and found that changes n technology domnated changes n neffcency n determnng changes n productvty. Ferrer and Valdmans(2008), studed the effcency and productvty changes n large urban hosptals n the Unted States and found that durng the perod hosptals made modest gans n ther economc performance by both mprovng ther techncal effcency and by adoptng more productve technologes. 3. METHODOLOGY Ths study was conducted n The study populaton ncluded two educatonal and medcnal hosptals n Tehran and data were collected from the study populaton for the years 2008 and In ths study, varable 1 DEAMI 11331

3 J. Basc. Appl. Sc. Res., 2(11) , 2012 numbers of doctors, beds, nurses and paramedcal staff were used as nputs and varable number of outpatents, patents havng surgery, the mortalty of patents and bedrdden days were used as outputs (Chang et al, 2011). Data were collected from annual statstcs of health department of educatonal and medcnal hosptals and a hybrd approach of DEA and Malmqust ndex was used to measure the productvty changes and both EMS and Excel soft wares were used to calculate the values. Total factor productvty growth due to changes n technology, effcency and qualty were defned over tme. Technology changes are expressed by means of effcency fronter transfer from t=0 perod to t+1 perod and changes n techncal effcency s dsplayed through shftng decsonmakng unt (DMU) closer to or farther from current fronter. Qualtatve changes are ndeed the use of Malmqust ndex wth a specfc rewrte n whch varables n mortalty are nvolvedas a benchmark aganst whch qualty change s measured (Fare et al, 1995; Chang et al, 2011). Gven the negatve nature, ths varable s reversely used ncalculatons to elmnate ts negatve effect. In ths study the followng relatonshp s used to measure changes n productvty of Malmqust total factors. Ths ndex s presented by Fare et al., (1995) and separates productvty change to three components of techncal effcency change, technologcal change and qualtatve change. Productvty change = techncaleffcencychange technologcalchange qualtatve change M QC EC TC QC D ( y, a, x ) D ( y, a, x ) D ( y, a, x ) D ( y, a, x ) D ( y, x ) EC D ( y, x ) TC D ( y, x ) D ( y, x ) D ( y, x ) D ( y, x ) M (ndex of Malmqust effcency change) measures the growth rate of productvty n the course of study n ths equaton and QC (ndex of qualty change) measures qualtatve changes between two perods and EC (ndex of effcency change) shows the change of performance per unt compared to ther counterparts n the perod and reflects the producton fronter and ndcates the dstance to ths fronter and fnally TC (ndex of technology change), reflects techncal progress through estmatng the producton fronter shft (Fare et al,1995, p.137) D s the functon of dstance and ( y, x ) s output and nput of t+1 perod and ( y, x ) s output and nput of t=0 perod. Malmqust ndex n the qualtatve change equaton s ndeed wth a specal rewrte n whch the dstance functon s used and we can apply tme changes to Malmqust ndex equaton usng a varable tme of mortalty. Thus, the set of ( y, a, x ) s the outputs and nputs of perod one countng qualty crtera of perod zero. And, the set of ( y, a, x ) s the outputs and nputs of perod zero countng qualty crtera of perod one. It s notceable that all dstance functons whch are used n the equatons are nverse performance values based on Farrell s theory (Farrell, 1957). Due to nputorented nature of ths study, valuesless than one and values more than one ndcatehgher and lower productvty respectvely and values equal to one reflect awthout ofproductvtychange (Fare et al,1994) (Hossenzadeh, 2007). 4. DATA ANALYSIS In the hosptals case study n 2008, there were 339 ± 115 actve beds, 119 ± 24 doctors, 271 ± 43 nurses and 237 ± 40 paramedcal doctors on average. And, these averages n 2009 were 248 ± 111 actve beds, 124 ± 24 doctors, 281 ± 26 nurses and also 249 ± 46 paramedcal staff. Average outputs n 2008 were ± outpatents, 8637±2772 patents havng surgery, ± npatent days and 222±74 of casualtes. Average outputs of hosptals n 2009 were ± outpatents, 7821±3079 patents havng surgery, ± npatent days and 215±61 casualtes. Descrptve statstcs for2008 and2009are depctedn Table

4 Mahd Mozaffar and Yazdan, 2012 Table 1; summery nformaton n 2008 and 2009 for research ndcators Indcator Average Standard Medan Average Standard Medan Devaton Devaton Doctors (X1) nurses (X2) Actve beds (X3) paramedcal staff (X4) Outpatents (Y1) patents havng surgery (Y2) Inpatent days (Y3) Casualtes (α) The results of nputorented model and constant effcency to DEAMI scale model are presented n Table 3. Unt DMU1 DMU2 DMU3 DMU4 DMU5 DMU6 DMU7 DMU8 DMU9 DMU10 DMU11 DMU12 DMU13 DMU14 DMU15 DMU16 DMU17 DMU18 DMU19 DMU20 DMU21 DMU22 DMU23 DMU24 DMU25 DMU26 DMU27 Average Table 3; nputorented model and constant effcency to DEAMI scale model results Qualty change Effcency change Technology change Productvty change The results of DEAMI nputorented wth output to a constant scale model shows that qualty change ndcator of 6 unts (1, 6, 9, 13, 23 and 27 respectvely wth values 0.92,, 0.93, 0.86, 0.77, 0.97 and 0.82) have the best mprovement n qualty changng. Qualty changes n unts 2, 4, 5, 10, 17, 19, 21, 22, 25 and 26 are 1 and t shows that no change s n qualty mprovements of these unts. It can be consdered for effcency change n nput orented and varablereturnsto scalemodelthat the effcency change s near to 1 and changes are n low range and t s because of beng return to scale of varables and reflect the changes more realstc.as t s consdered n table 2 the unts 1, 3, 11, 23 and 24 respectvely wth values, 0.93,, 0.92 and 0.89 reflect the best mprovements and unts 8, 9, 19, 21, 22, 25 and 27 respectvely wth values 1.17, 1.11, 1.19,, 1.11, 1.27 and reflect the worst declnng levelof effcency. For technology change ndcator n varable return to scale model for unts 5, 10, 17 and 26 s predcted no technology change (the rate of change s equal to 1), and for other unts s more than one that shows negatve growth n technology change for unts under study. Also Malmqust ndcator (M) shows the decrease of productvty change. Accordng to table 2 for DMUs 1, 3, 13 and 23 the smaller amount of 1 are obtaned that show the mprovement of productvty n nvestgatng tme. Furthermore n unt 11 some mprovement s consdered. For 11333

5 J. Basc. Appl. Sc. Res., 2(11) , 2012 unts 5, 10, 17 and 27 the resultng value for Malmqust s equal to 1 that t means there s no change n that unts productvty. In other hosptals the values were more than 1 and t means there s decrease n productvty change level. Table 3 shows the Frequency dstrbutonof untsn relaton wth ndexes mentoned above. Change range CR> 10% (Increase) 10%>CR>5%(Increase) 5%>CR>1%(Increase) CR=1 (no change) 5%>CR>1% (Decrease) 10%>CR>5% (Decrease) CR> 10% (Decrease) Table 3; frequently of dstrbuton accordng to change range (DEAMI_CRSInput) Qualty change 4unt 4 unt 9 unt 10unt Effcency change 1 unt 2 unt 6 unt 6 unt 1 unt 4 unt 7 unt Technology change 4unt 5unt 4unt 14unt Productvty change 3 unt 3 unt 1 unt 4 unt 16 unt Accordng to table 2 we can consder that qualty change ndcator had ncreased growth n 2009 than 2008 and as a result t can be sad that qualty crteron was mproved. Also the result about effcency change ndcator express decreasng level of changes and t can be sad that effcency change n nvestgatng tme was declnng and effcency was decreased n Accordng to table s nformaton about technology change, t s consdered that technology change had decreasedtrend and so t argues that hosptal s effcency n 2009 had decreased than Fnally accordng to productvty change ndcator nformaton n table 2 t can be concluded that productvty changes trend n nvestgatng tme was decreasng and as a result the productvty n 2008 was less than productvty n Concluson Based on the results, we understand that total productvty factors n both educatonal and medcnal hosptals of Tehran declned durng the study perod and technology changes s the major effectve factor n ths declne.by usng DEAMI method not only the productvty analyss would be more tangble, but also t can dvde productvty changes nto three factors (qualtatve changes, effcency changes, and technology changes) and dentfy the man factor of possble changes. Ths research has used the hybrd method n Chang et al., (2011) and Sola and pero (2001) and pero s researches (2006) to measure productvty and shows some dfferent results. Lke other researches, they used an approach based on DEA, but the usage s qute dfferent. For example, dfferent DEA approaches wth dfferentspecfcatons were compared n O Nel s research. Two DEA approaches were compared ncheng's research. Whle, n ths research DEA approach s compared wth combned DEAMI approach. And, Mr. Swanson measured the relaton between electronc records and performance usng DEA, but n ths study DEA has been used to calculate Malmqust ndex. In general, t s recommended to use other ndexes of qualty changes such as facltes and operatng rooms equpment, rates of avalable drugs, watng tme for patents recevng servces, duraton of treatment process (Fare et al, 1995), varables and fnancal ratos lke costs per patent dscharge, fxed nvestments and ncome comparson, and patent dscharge and staff comparson (Clevely&harvvey, 1992) and other varables related to hosptals for a better measurement. Regardng the mpact of technology as the man factor of reducton n productvty, t s suggested that managers wth relevant educaton be hred n hosptals. And, there could be courses for people n charge on how to use new technologes to keep up wth growng technology. REFERENCES Abby Swanson, Kazley&Yasar A. Ozcan, (2009) Electronc medcal record use and effcency: A DEA and wndows analyss of hosptals, SocoEconomc Plannng Scences, No. 43, p: Aktas, E. Ulengn, F. &Sahn, SO., (2007). A decson support system to mprove the effcency of resource allocaton n healthcare management, SocoEconomc Plannng Scences, No.4, pp Alam Tabrz A., Iman pour M., (2008) Measurng Relatve Effcency of Health Care Hosptals Usng Data Envelopment Analyss(DEA), Internatonal Journal Of Management Perspectve, No.31, p: Ancaran& et al, (2009) The mpact of manageral and organzatonal aspects on hosptal wards effcency: Evdence from a case study, European Journal of Operatonal Research, No.194, pp

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