Public and Private Hospital Services Reform Using Data Envelopment Analysis to Measure Technical, Scale, Allocative, and Cost Efficiencies

ABSTRACT Background: The aim of this study was to suggest a suitable context to develop efficient hospital systems while maintaining the quality of care at minimum expenditures. Methods: This research aimed to present a model of efficiency for selected public and private hospitals of East Azerbaijani Province of Iran by making use of Data Envelopment Analysis approach in order to recognize and suggest the best practice standards. Results: Among the six inefficient hospitals, 2 (33%) had a technical efficiency score of less than 50% (both private), 2 (33%) between 51 and 74% (one private and one public) and the rest (2, 33%) between 75 and 99% (one private and one public). Conclusion: In general, the public hospitals are relatively more efficient than private ones; it is recommended for inefficient hospitals to make use of the followings: transferring, selling, or renting idle/unused beds; transferring excess doctors and nurses to the efficient hospitals or other health centers; pensioning off, early retirement clinic officers, technicians/technologists, and other technical staff. The saving obtained from the above approaches could be used to improve remuneration for remaining staff and quality of health care services of hospitals, rural and urban health centers, support communities to start or sustain systematic risk and resource pooling and cost sharing mechanisms for protecting beneficiaries against unexpected health care costs, compensate the capital depreciation, increasing investments, and improve diseases prevention services and facilities in the provincial level.