Technical and scale efficiency of government district base hospitals in Srilanka

Abstract

To study of technical and scale efficiency and to observe the factors affecting on efficiency in government district base hospitals in Sri Lanka. Data envelopment analysis or DEA with Tobit regression analysis were used to find solutions. 168 decision making units or DMUs were evaluated concerning 56 hospitals for three years (2006, 2007, and 2008). Initial relative efficiency results show that technical efficiency level has ranged between 0.383 and 1.0, average score level was 0.818 while the scale efficiency level has ranged between 0.412 and 1.0, its’ average score was 0.905. Moreover, 71% of DMUs has been operating at technical inefficiently while 83% were scale inefficiently. Among scale inefficient DMUs, 32% DMUs show increasing returns to scale and 68% of DMUs show decreasing returns to scale. After implementation of health master plane 2007-2016, there is an increasing trend on technical and scale efficiency. Secondly, Tobit regression analysis found that bed occupancy ratio positively related with technical efficiency [.299, p = .017] and bed physician ratio negatively associate with technical efficiency [.0008, p = .044] and also hospitals belong to MoH are technically efficient rather than provincial hospitals. When increase the ratio of nurses’ physician and allied health personnel physicians, technical efficiency will be increased. However, these factors are statistically insignificant. Large hospital (Type A) technically and scale efficient than smaller hospitals (Type B). Number of admissions tended to increase scale efficiency [-1.34E-06, p = .00]. Majority of institutions are operating at decreasing returns to scale. So, the reducing bed size from those institutions is recommended. It will be directed them towards efficiency because of the bed occupancy ratio highly positively associated as well as the bed physician ratio related with it.