Assessing the impact of COVID-19 on the efficiency of Portuguese state-owned enterprise hospitals

Abstract

This paper uses Value-Based Data Envelopment Analysis (VBDEA), to assess the impact of the COVID-19 pandemic on the efficiency of 37 state-owned enterprises (SOE) hospitals by employing data publicly available from the Portuguese Health Service database between January and November 2019 and 2020, respectively. Furthermore, a productivity index (specifically adjusted to the VBDEA approach) is also used that allows identifying which factors are behind the relative efficiency changes of these hospitals. The factors considered to perform the efficiency assessment of the Portuguese SOE hospitals include labour, capacity, and activity-related indicators. Out of the 37 SOE hospitals, 21 and 17 were efficient in 2019 and 2020, respectively. Irrespective of the value functions considered, the hospitals more often viewed as a reference for best practices were Santa Maria Maior, Tâmega e Sousa and Entre Douro e Vouga. Santa Maria Maior and Algarve were the only hospitals found to be robustly efficient for both years. Overall, the majority of SOE hospitals showed negative productivity (except for Évora and Santa Maria Maior) and all of them presented negative technological change, thus highlighting the massive impact that the COVID-19 outbreak has had on the performance of these hospitals. An additional conclusion is that inefficient hospitals substantially increased all their resources in 2020 as compared to inefficient hospitals in 2019, suggesting that the inefficiency of these hospitals was not due to the lack of resources. Finally, irrespective of the model employed, the hospitals located in the Portuguese northern region were more resilient to the COVID-19 crisis. All in all, to become more resilient (even for future COVID-19 outbreaks), hospitals should undertake changes that are advantageous irrespective of the obstacles they face and that are even beneficial during normal times. A culture of cooperation within and across hospitals should also be cultivated, which allows exchanging resources where they can be used more efficiently.

Keywords: COVID-19; DEA; Multicriteria decision analysis; Productivity; Uncertainty.

Fig. 1

Two of the value functions elicited.

Fig. 2

Ranking of efficient SOE hospitals in 2020 vs. 2019.

Fig. 3

Nomination of each efficient SOE hospital as a benchmark in 2020 vs. 2019.

Fig. 4

Factors held responsible for the efficiency of SOE hospital in 2020 vs. 2019.

Fig. 5

Variation of the average values attained for the factors of efficient and inefficient hospitals between 2019 and 2020.

Fig. 6

Difference between the average factors of efficient vs inefficient and efficient vs all hospitals in 2019 and 2020.

Fig. 7

Average improvements required from inefficient hospitals to become efficient between 2019 and 2020.

Fig. 8

Contribution to TFP - efficient hospitals in 2020.