Data Envelopment Analysis In The Assessment Of Hospital Efficiency

Since the reform and opening up of China, the health services have undergone fundamental progress, with substantive increase in the numbers of medical institutions, their beds, and medical technicians. Traditional difficulties in meeting the demand for medical service have been greatly alleviated. But new problems have emerged under new situation, typically embodied in the low efficiency of the medical services system and huge waste in health resources. Thus, how to improve the operation efficiency of medical institutions, to have health resources fully utilized by hospitals, and to realize the optimization of relevant social benefit and economic benefit have been a critical task facing those health policy makers and hospital managers.The first problem remaining to be solved in heightening the operation efficiency of hospitals is to evaluate the efficiency both scientifically and precisely. At present, different evaluating methods are commonly used, among them the Data Envelopment Analysis (or DEA) one of the most advanced and matured, especially fit for efficiency evaluation of hospitals with multi-inputs and multi-outputs. DEA not only can evaluate the technical efficiency and scale efficiency of hospitals, but also can implement quantitative analysis over the existent input and output problems of lower-efficiency hospitals, which assists hospital managers in making decisions for operation efficiency improvement.This paper carries out evaluation and analysis on the efficiencies of seventeen general hospitals and fifteen TCM hospitals in the sample, based on the C2R and C2GS2 models in DEA. The results can be shown in four aspects. First of all, by calculating the general efficiency, technical efficiency and scale efficiency for individual hospital, I find that generally, efficiencies among grade-two hospitals are not satisfactorily high, and that a majority of the hospitals are over-sized. I provide a comprehensive analysis over the operating status of hospitals belonging to different classifications, together with suggestions for future development guidelines. Secondly, by applying the projection analysis in C2R model, I implement a quantitative analysis over the main input and output problems for the twenty-one lower-efficiency hospitals, revealing that all the sampled hospitals waste their manpower, operating expenses and fixed assets to various extent, and that the output problems center on the inadequacy of medical service provision. Thirdly, I compare the efficiency performance between the sampled TCM hospitals and the general hospitals based on the results from DEA evaluation. My conclusion is that the general efficiencies of grade-two TCM hospitals are higher than those of grade-two general hospitals in Beijing. Low technical efficiencies pose a main problem to the former hospitals, whereas excessively large sizes to the latter. Lastly, I carry through case studies on efficiencies of two hospitals via Ratio Analysis. I make an explicit diagnose over the problems of the two hospitals and advance solutions according to their de facto status. Furthermore, this paper attempts to evaluate hospital efficiency with various combinations of factors and analyzes the relationship between factor picking and the results obtained. Suggestions are made for factor picking in further application of other DEA models.Since there is no existing analytical software specialized in DEA in China, I have developed a computer program for DEA analysis (including C2R and C2GS2 models) by myself, employing VBA language programming combined with the linear programming solution module in EXCEL of Microsoft Office 2000. This will expedite future application of DEA methodology in efficiency evaluation for medical institution and other relevant domains.