Efficiency measurement in developing countries: application of data envelopment analysis for Iranian hospitals

Abstract

Hospitals have been at the core of health care in most countries during past decades, in view of the importance and criticality of their services and absorbing the highest quota of health care financial resources. Specific problems associated with these organizations in developing countries, such as Iran, have further added to the attention they have received over the course of those years. Efficiency measurement of hospitals based on simple ratios has long been utilized to remedy these problems in Iran. However, application of data envelopment analysis as an advanced method for measuring efficiency of health care organizations is mostly unexplored in this country. The current study has applied this method to investigate technical efficiency of a group of provincial hospitals in Iran. The findings showed that just under 60% of all hospitals at the province were technically efficient, and the remainder faced excess number of inputs (specifically in their non-clinical human resources) that should be attended to by the managers. Implications for practice and research on the efficiency of hospitals in the country and similar settings are provided.