Technical Efficiency of Regional Hospitals, Evidence from Albania using Data Envelopment Analysis

Abstract

The evolving strategies to finance hospitals in more efficient ways, and, specifically on the reforms of the Albanian Health System to introduce the DRGs, aiming the improvement of hospital service productivity, the technical efficiency of the Albanian hospitals necessities to be evaluated. This study performs, given a level of inputs, the ranking of the regional hospitals based on their technical efficiency.

There have been collected data on all eleven Albanian regional hospitals for three consecutive years, 2015-2017. The data relate to input data such as number of physicians, nurses, hospitals’ capacity and it’s financing. The output data instead, relate to the number of hospital patients’ discharges.  The data have been analyzed by Data Envelopment Analysis (DEA), a technique used in service management and benchmarking. This technique compares regional hospitals considering all resources used and services provided and identifies the most efficient hospitals or best practice hospitals.

The results suggest that more that 50% of all regional hospitals result efficient, followed by the other hospitals with an average of 7% reduction on technical efficiency.

The study evidenced that the majority of the Albanian Regional Hospitals’ operate at the efficient frontier followed by other hospitals that operate just below. The efficient levels of hospitals indicate an optimal use of their capacities in offering services to the population.