Data Envelopment Analysis of Technical and Cost

Anukul Kittiyarattanawong. 2010. Data Envelopment Analysis of Technical and Cost
Efficiency of Community Hospitals in Nakhon Ratchasima Province.
Master of Economics Thesis in Business Economics, Graduate School, Khon Kaen University.

ABSTRACT

The purpose of this study was to analyze the technical efficiency and cost efficiency of community hospitals in Nakhon Ratchasima Province and to purpose the recommendation of increasing the hospital’s efficiency. Data of total 26 community hospitals were collected in fiscal year 2008. In this study, the hospitals were divided into 3 groups by Geographic Information System (GIS), which were the secondary care at primary level (2.1), the secondary care at middle level (2.2) and the secondary care at height level (2.3). The analysis of hospital’s efficiency applied Data Envelopment Analysis: DEA Method. The Model in this study used BCC Model (Input-oriented). Total variables use in this study were 15 variables, that were, four variables of output factor (Inpatient Day, Outpatient Day, Bed Occupancy Rate, and Bed Turnover Rate), six variables of input factor (Doctor, Nurse, Other People, Bed, Durable Goods Items, Land and Construction Items), and, five variables price of input factor (Wage of Doctor, Wage of Nurse, Wage of other personal, Wage of Budget of Durable Goods, and Budget of Construction).
This study found that there were 20 hospitals out of 26 community hospitals had the technical efficiency score equal to 1 point or fully of technical efficiency. The community hospitals in the secondary care at primary level (2.1) had the highest technical efficiency. Overall community hospitals in Nakhon Ratchasima had the average technical efficiency score at 0.9756 or 97.56 %. When compare the score with production possibility curve at the level of productivity, it showed that the community hospitals in Nakhon Ratchasima province could provide service for the patients at 97.56 %. The hospitals could improve the operation efficiency by reducing factor input at 2.44 %.
For the results of cost efficiency analysis found that 19 community hospitals had fully cost efficiency. The community hospitals at the secondary care at height level (2.3) group had the highest average cost efficiency score. The average cost efficiency score of all community hospitals were at 0.9560. It meant that the community hospitals in Nakhon Ratchasima province could manage resources to provided service for the patients in the effective way at 95.60 %. The hospitals could improve the operation efficiency by reducing factor input at 4.40 %.