Efficiency measurement using econometric stochastic frontier analysis (SFA) method, Case study: hospitals of Kermanshah University of Medical Sciences

authors:

avatar Reza Goudarzi 1 , avatar Nader Rjabi Gilan 2 , avatar Seyed Ramin Ghasemi 2 , * , avatar Soheila Reshadat 2 , avatar Rouhollah Askari 3 , avatar Mohammad Ahmadian 2

Research Center for Health Services Management, Institute for Future Studies in Health, Kerman University of Medical Sciences, Kerman, Iran
Social Development & Health Promotion Research Center, Kermanshah University of Medical Sciences, Kermanshah, Iran
Dept.of Healthcare Management, Shahid Sadoughi University of Medical Sciences, Yazd, Iran

how to cite: Goudarzi R, Rjabi Gilan N, Ghasemi S R, Reshadat S, Askari R, et al. Efficiency measurement using econometric stochastic frontier analysis (SFA) method, Case study: hospitals of Kermanshah University of Medical Sciences. J Kermanshah Univ Med Sci. 2014;17(10):e74336. doi: 10.22110/jkums.v17i10.911.

Abstract

Background: Full consideration of the performance and efficiency of hospital costs necessitates the application of   economic analysis techniques. The aim of this study was to assess the efficiency of hospitals in Kermanshah University of Medical Sciences through Stochastic Frontier Analysis (SFA) method.
Methods: The performance of Kermanshah hospitals (n=7) was assessed and analyzed by Stochastic Frontier Analysis (SFA) method during 2005-2011. Inpatient admission was considered as the output variable, while the number of medical doctors, nursing staff other personnel, active beds and outpatient admission were considered as the input variables. Frontier 4.1 software was used to analyze the data.
Results: Based on the results of performance evaluation using Cobb-Douglas production function, the mean efficiency score of the hospitals in the SFA method was 0.63. Also, the efficiency capacity in these hospitals could be promoted up to 37 percent.
Conclusion: Based on the results of Stochastic Frontier Analysis, downsizing the manpower in hospitals plays a major role in reducing hospital costs and improving their performance. Finally, it is necessary to investigate the effect of factors such as quality of service and patient satisfaction on hospital performance.

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