Technical efficiency of hospitals in east and west wollega zones, oromia region, Ethiopia.

Abstract

Back ground: In the past few decades, health care efficiency has become as an issue of great interest to many governments and private sectors. Persistent growth in health expenditures coupled with fiscal pressures have led to widespread calls for efficiency improvements. Ethiopia’s five-year Health Sector Transformation Plan (2015/16-2019/20) also calls for improvements in efficiency of resource use along with continued investments in PHC. Despite of different studies carried out regarding the efficiency measurement, only few were able to conduct at hospital level using two-stage DEA aiming at explanation of the efficiency score. Objectives: The objective of this study was to measure the technical efficiency (TE) of the hospitals in East and west Wollega zone, Oromia region, Ethiopia. Methods: This study utilized cross sectional data (record review) of 2017/2018(2010 EFY) for 11 hospitals during time period. The analysis of hospitals was in three major categories, grouped into primary, general, and specialized hospitals to be analyzed distinctively. Three inputs (salary of total staff, total recurrent expenditure and total number of beds) and four outputs (number of outpatient visits, number of inpatients, number of delivery and family planning clients) were used. Data was analyzed in the first stage using DEAP Version 2.1output oriented model, in the second stage the efficiency sore of each hospital was examined for determinants of the inefficiency using stata v 14.2 left censoring Tobit model. Result: The efficiency results indicated that on average the inefficiency observed in the hospitals was both in technical and scale inefficiency with closer efficiency score mean 77.8%, SD 0.157 and 87.9%, SD 0,154 respectively. This implies that on average technically inefficient hospitals could increase their output by about 22.2% without additional input. Six (54.5%) out of eleven hospitals exhibited constant returns to scale while five (45.5%) experienced variable returns to scale in their operations. Four operated in increasing returns to scale, and only one hospital showed decreasing returns to scale. In the second stage DEA, the inefficiency score was considered for regression. The coefficient for Physician to total clinical staff ratio, presence of clinics/hospitals and service year of the hospital had a negative signs and were statistically significant at 5 percent level of significance. Conclusion: The hospitals expenditures (inputs) increased more than the equivalent increase of output. This overall low output production for studied hospitals might be brought on by inappropriate management of resources including work force and low health care demand