DEA-Based Incentive Regimes in Health-Care Provision

A major challenge to legislators, insurance providers and municipalities will be how to manage the reimbursement of health-care on partially open markets under increasing fiscal pressure and an aging population. Although efficiency theoretically can be obtained by private solutions using fixed-payment schemes, the informational rents and production distortions may limit their implementation. The healthcare agency problem is characterized by (i) a complex multi-input multi-output technology, (ii) information uncertainty and asymmetry, and (iii) fuzzy social preferences. First, the technology, inherently nonlinear and with externalities between factors, yield parametric estimation difficult. However, the flexible production structure in Data Envelopment Analysis (DEA) offers a solution that allows for the gradual and successive refinement of potentially nonconvex technologies. Second, the information structure of healthcare suggests a context of considerable asymmetric information and considerable uncertainty about the underlying technology, but limited uncertainty or noise in the registration of the outcome. Again, we shall argue that the DEA dynamic yardsticks (Bogetoft, 1994, 1997, Agrell and Bogetoft, 2001) are suitable for such contexts. A third important characteristic of the health sector is the somewhat fuzzy social priorities and the numerous potential conflicts between the stakeholders in the health system. Social preferences are likely dynamic and contingent on the disclosed information. Similarly, there are several potential hidden action (moral hazard) and hidden information (adverse selection) conflicts between the different agents in the health system. The flexible and transparent response to preferential ambiguity is one of the strongest justifications for a DEA-approach. DEA yardstick regimes have been successfully implemented in other sectors (electricity distribution) and we present an operalization of the power-parameter p in an pseudo-competitive setting that both limits the informational rents and incites the truthful revelation of information. Recent work (Agrell and Bogetoft, 2002) on strategic implementation of DEA yardsticks is commented in the healthcare context, where social priorities change the tradeoff between the motivation and coordination functions of the yardstick. The paper is closed with policy recommendations and some areas of further work.Data Envelopment Analysis, regulation, health care systems, efficiency, Health Economics and Policy,

Estimating Technical Efficiency of Australian Dairy Farms Using Alternative Frontier Methodologies

In this paper we estimate and examine technical efficiency for a cross-section of Australian dairy farms using various frontier methodologies; Bayesian and Classical stochastic frontiers, and Data Envelopment Analysis. Our results indicate technical inefficiency is present in the sample data. We also identify statistical differences between the point estimates of technical efficiency generated by the various methodologies. However, the rank of farm level technical efficiency is statistically invariant to the estimation technique employed. Finally, when we compare confidence/credible intervals of technical efficiency we find significant overlap for many of the farms’ intervals for all frontier methods employed. Our results indicate that the choice of estimation methodology may matter, but the explanatory power of all frontier methods is significantly weaker when we examine interval estimate of technical efficiency

Analysing Productivity Changes Using the Bootstrapped Malmquist Approach: The Case of the Iranian Banking Industry

This study employs various bootstrapped Malmquist indices and efficiency scores to investigate the effects of government regulation on the performance of the Iranian banking industry over the period 2003-2008. An alternative decomposition of the Malmquist index, introduced by Simar and Wilson (1998a), is also applied to further decompose technical changes into pure technical change and changes in scale efficiency. A combination of these approaches facilitates a robust and comprehensive analysis of Iranian banking industry performance. While this approach is more appropriate than the traditional Malmquist approach for banking efficiency studies, it has not previously been applied to any developing country’s banking system. The results show that although, in general, the regulatory changes had different effects on individual banks, the efficiency and productivity of the overall industry declined after regulation. We also find that productivity had positive growth before regulation, mainly due to improvements in pure technology, and that government ownership had an adverse impact on the efficiency level of state-owned banks. The bootstrap approach demonstrates that the majority of estimates obtained in this study are statistically significant

An Analysis of Productivity Changes in the Iranian Banking Industry: a Bootstrapped Malmquist Approach

This study employs various bootstrapped Malmquist indices and efficiency scores to investigate the effects of government regulation on the performance of the Iranian banking industry over the period 2003-2008. An alternative decomposition of the Malmquist index, introduced by Simar and Wilson (1998a), is also applied to decompose technical changes further into pure technical change and changes in scale efficiency. A combination of these approaches facilitates a robust and comprehensive analysis of Iranian banking industry performance. While this approach is more appropriate than the traditional Malmquist approach, for the case of banking efficiency studies, it has not previously been conducted for any developing country’s banking system. The results obtained show that although, in general, the regulatory changes had different effects on individual banks, the efficiency and productivity of the overall industry declined after regulation. We also find that productivity had positive growth before regulation mainly due to improvements in pure technology, and that government ownership had an adverse impact on the efficiency level of state-owned banks. The bootstrap approach demonstrates that the majority of estimates obtained in this study are statistically significant

The efficiency of universities' knowledge transfer activities: a multi-output approach beyond patenting and licensing

Using data from the United Kingdom, we analyse the relative efficiency with which university institutions engage in knowledge transfer activities, and study the institutional and environmental factors that influence their efficiency. While most current studies limit their focus to intellectual property disclosures, we focus on a broad range of knowledge transfer outputs that include also research and consultancy contracts, professional training courses, and public engagements

Effects of Input Composition on Technical Efficiencies of Textile Industries in Pakistan

This paper studies the technical efficiencies of the textile manufacturing industries in Pakistan using 5-digit level industry data. Technical efficiencies are computed by the Data Envelopment Analysis technique assuming constant as well as variable returns to scale. The efficiency scores thus obtained are analysed by the TOBIT regression technique to determine how input composition influences these efficiency scores. It is found that imported raw material and machinery exercises a positive effect, whereas non-industrial costs affect technical efficiencies in a negative way. Electricity does not play its due role in affecting technical efficiencies. JEL Classification: C24, D24, L6, O14 Keywords: Technical Efficiency, Data Envelopment Analysis, TOBIT Analysis, Manufacturing Industrie

“High Spending, Poor Productivity Gains!” Assessing Public Health System (In)Efficiency and Hospital Performance In The State Of Kuwait: Would More Private Delivery Improve Healthcare?

The healthcare sector in the State of Kuwait has been nurtured for many decades by the government, where the majority of health services in the country are controlled by the Ministry of Health (MoH). Although healthcare services in public sector hospitals are at highly subsidized rates, causing private sector involvement in healthcare to be considerably low, the growing demands for private delivery of care burgeoned participation of private hospitals in Kuwait, and improving hospital efficiency and productivity is more critical and timelier than ever. This dissertation aims to analyze public health system efficiency and hospital performance in the State of Kuwait using data envelopment analysis (DEA) techniques; where we begin by evaluating the input-oriented technical efficiency (TE) of MoH hospitals in 2015-2019 and identifying potential areas for efficiency improvement by exploring influencing institutional and environmental factors. We further conduct an output-oriented comparative study of public-private productivity in view of ownership, hospital management, and other external variables to understand drivers of productive efficiency and potential factors of output maximization disparities in 2019/2020

A nonparametric approach to productive efficiency measurement : an application of bootstrap DEA to gold mining

In this dissertation the technical efficiency in gold mining is investigated. To the best available knowledge, this is the first such study on gold mining, whether on a localised (one country) or for a cross-section of countries. Since the work by Farrell (1957), much work has been done using nonparametric methods such as DEA. Although extensions in DEA technique, such as bootstrapping have been available for some time, their use has been limited in comparison with the number of overall DEA studies carried out. In this dissertation both DEA and bootstrap DEA are applied to two gold mining cross sectional samples, one on Zimbabwe consisting of thirty-four mines, and the an international one which also included some Zimbabwean mines which comprise fifty-nine observations.The main reason for carrying out the study is an interest in gold mining in general and its importance to Zimbabwe in particular. As will be noted in Chapter 2, the economic development of Zimbabwe has been linked, to a varying extent over the ages, to its growth of the gold mining sector.The results of the dissertation provide some useful insights into the relative performances of gold mines and also some characteristics of the Zimbabwean gold mining sector. The main results indicate that gold mining is characterised mainly by technical efficiency dominating scale efficiency. This is particular relevant when the Zimbabwean mines are compared with their international counterparts. Zimbabwean mines are found to be relatively technically efficient but less so when overall efficiency is considered. In fact they have the lowest overall efficiency scores in the international sample. The results also indicate that mines from the so-called developed mining economies, Australia, Canada, the US and South Africa are the benchmarks in terms of optimal operations. It is mines from these countries which define the overall efficiency frontier.The results of both the samples highlight potential shortcomings in applying DEA and bootstrap extension to gold mining, both for single country and for cross-country cases. Additionally, there are possibilities, with adequate data, of relating country-specific characteristics to differences in overall efficiency among countries.Finally there are indications that including mineralogical factors such as the recovery rate in the production technology has an effect on technical efficiency. Mines with low recovery rates tend to exhibit comparatively higher technical efficiency. The study does have some limitations, mainly because of lack of data. In particular, there were problems in coming with attributing the contribution of capital services to efficiency with the result that a different measure for the flow of capital services is used for each sample. In addition, the two samples are for different time periods. This limits comparative analysis

Data Envelopment Analysis for Relative Efficiency Measurement of Chinese Hospitals: A Systematic Review

The purpose was to explore the gap between China and the international world in efficiency measurement of hospitals with Data Envelopment Analysis, and to improve the standardization of healthcare efficiency measurement in China. A systematic review was conducted using appropriate search strategies. Studies were included containing DEA approaches regarding general hospital efficiency, published in international literature and in both Chinese and English about Chinese hospitals from January 2004 to October 2014. The results showed that statistical significances were found in indicators such as number of DMUs, percentage of allocative efficiency studies, ratio of studies with multiple years, number of studies with monetary indicators in input and output sets, etc. The statistical insignificance in some indicators such as the number of input and output indicators were also found among China, Europe, USA and others. Some problems were found in current DEA-based hospital efficiency studies in China, such as inappropriate selection of input-output indicators, no bias-correction on efficiency scores, etc. The standardization of DEA methods applied in China’s hospital efficiency research needs to be improved. Chinese researchers should pay more attention to latest international research findings, so as to keep pace with the cutting edge hospital efficiency research