Technical Efficiency of Selected Hospitals in Addis Ababa: Data Envelopment Analysis Approach

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Date

2006-07

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Addis Ababa University

Abstract

The study measured the technical efficiency of seventeen hospitals in Addis Ababa using a five year panel data(2000/01-2004/05) employing both parametric and non-parametric models. We used DEA and DEA-Malmquist models (non-parametric approach) to identify the level of efficiency of hospitals, while determinants of technical efficiency were examined using a censored-Tobit regression model (parametric approach). Results of the CRS DEA model showed that 5(29.4%) hospitals were found technically Efficient, while 12(70.6%) were inefficient. The VRS DEA model indicated 9(52.9%) Hospitals were technically efficient and 8(47.1%) Hosppitals were technically inefficient. Out of the sampled hospitals, 5(29.4%) hospitals were found scale efficient, while12 (70.6%) were scale inefficient. The results of the censored-Tobit model indicated that age, size, teaching status, average bed occupancy rate and number of medical doctors to total staff were found significantly associated with technical efficiency scores.

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Economic Policy Analysis

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