Measuring the Efficiency of Chilean Primary Healthcare Centres

Abstract

This paper examines whether different approaches for estimating the technical efficiency of a primary healthcare centre —PHC— can have significantly different results. Although effective regulation demands the development of measures for establishing good operation levels, few studies have compared results from a data envelopment analysis —DEA— and stochastic frontier analysis —SFA—in a PHC. Furthermore, to the best of our knowledge, no studies have used Chilean nationwide data. Efficiency refers to the relation between the number of output units per input unit. Effectiveness evaluates the outcome of medical care and can be influenced by efficiency. The data that were used in this study came from 259 Chilean municipalities. We included two outputs – medical and check-up visits – and three inputs – staff, general service and drugs expenses. For the DEA, we used a variable return to scale output-oriented model. Before applying the SFA, a principal component analysis —PCA— combined the two outputs. The results were similar for both methods: the SFA efficiency averages were 70.89% and 65.83% and the DEA averages were 68.37% and 54.46% for the urban and rural municipalities, respectively. In addition to defining a frontier of “best practice”, this study merged the PCA with the SFA to form an innovative approach to combining outputs.