Ownership and technical efficiency of hospitals

Abstract

The findings in this paper revealed the sample public hospitals to be more efficient relative to the sample NFP hospitals. Tight governmental control over the resources allocated to public hospitals may be one reason why these hospitals appear more efficient. Conversely, NFP hospitals appear less efficient but, in general, offer more diversified and sophisticated medical services. Therefore, even in the absence of the profit motive, the nonprofit and public sector are different enough to result in different productivity levels. This paper illustrates the applicability of the nonparametric technique in the measurement of relative technical (overall and pure) productive performance between NFP and public hospitals. The measures of inputs and outputs were relatively rough, and measures of scope of services were also crude. However, as data collection techniques improve and more precise information becomes available, this methodological approach can prove useful in the analysis of hospital efficiency and, in turn, the shaping of hospital policy.