Measuring and comparing the (in)efficiency of German and Swiss hospitals

Abstract

A nonparametric data envelopment analysis (DEA) is performed on hospitals in the federal state of Saxony (Germany) and in Switzerland. This study is of interest from three points of view. First, contrary to most existing work, patient days are not treated as an output but as an input. Second, the usual DEA assumption of a homogeneous sample is tested and rejected for a large part of the observations. The proposed solution is to restrict DEA to comparable observations in the two countries. The finding continues to be that hospitals of Saxony have higher efficiency scores than their Swiss counterparts. The finding proves robust with regard to modifications of DEA that are motivated by differences in hospital planning in Germany and Switzerland.