Factors affecting efficiency of social security hospitals in Iran: Data Envelopment Analysis

Background: Existing hospitals in an obscure, complex environment with lots of factors affecting the manager's decision making process, and increasing cost of care in recent years confirm the importance of using appropriate techniques to evaluate hospital performance and factors affecting this index to increase hospital efficiency. For this reason, the technique used in this study is based on non-parametric data envelopment analysis. Increasing interest in using this method is because of the ability to rank efficient hospitals as compared to their inefficient counterparts. Methods: This study examines the technical, managerial and scale efficiency of public hospitals affiliated to social security organization in Iran, between 2006-2008 by estimating a deterministic frontier production function and the variable return to scale (VRS), and input-oriented DEA model. Results: The technical efficiency scores from this model showed that overall efficiency improved from 0.954 to 0.964, during the period of this study, implying that these hospitals have the potential of reducing 4% of their inputs with no impact on output levels. Also, the efficiency measurement derived from this method showed that the average scale efficiency was 95%. The results from input slacks revealed that the number of personnel was more than the input target. Conclusion: This study highlights the importance of using an appropriate strategy resource allocation and rationalizes their usage in order to improve hospital efficiency. Furthermore, one of the essential activities of a hospital manager is continuous evaluation of hospital performance and application of the proper technique for improving efficiency.