Evaluating the Efficiency of Public Hospitals in Iran: A Comparative Study Using Extended Data Envelopment Analysis, 2012-2016

Background: In pursuing improving healthcare quality and enhancing efficiency, public hospitals in Iran have undergone numerous reforms over the past two decades. This study aimed to assess the efficiency of all public hospitals in Iran from 2012 to 2016.Methods: This study was conducted as a quantitative and descriptive-analytical research project. The authors employed an innovative approach called Extended Data Envelopment Analysis (Extended-DEA), a modification of conventional DEA, to assess the technical efficiency and productivity of 568 public hospitals. They obtained nationally representative data from official annual health reports. The data were analyzed using GAMS software version 24.3.Results: The study found that the average efficiency score for all hospitals was 0.733. Among all the hospitals, 10.1% were deemed efficient, while 2.68% had low-efficiency scores below 0.2. The Malmquist Productivity Index (MPI) showed improvement in 49.3% of hospitals and remained unchanged at 2.3%. In comparison, 48.2% of hospitals experienced a regression in productivity from 2015 to 2016. On average, the MPI was 1.07 throughout the analysis.Conclusion: The findings of this study suggest that there is a need for increased efforts to improve the efficient utilization of resources in public hospitals. It highlights the importance of developing appropriate policy solutions and tools to address these efficiency challenges. In particular, one proposed strategy is the merger of small-sized district hospitals to establish larger and more efficient hospitals in different geographical regions across the country.