The Efficiency of General Public Hospitals in Fars Province, Southern Iran

Background: Regarding the increase in expenses for health care services in inpatient settings, much effort has been made to compare the performance of hospitals in recent years and measure their efficiency. In this study, Data Envelopment Analysis (DEA) is applied to measure the technical, scale and economic efficiency of the general public hospitals in Fars Province, southern Iran. Methods: Twenty one general public hospitals in Fars province, southern Iran in the first and second six months of the years 2005 and 2006 were enrolled. There was an attempt to compare their rate of development or otherwise, using Malmequist index and also to determine their return to scale and rank during these years. The data were collected through a questionnaire by interview and the existing documents were analyzed separately for each year by Algebraic Modeling System (GAMS) software. Results: Fifteen hospitals (71.4%) were technically efficient and in the next three periods, 14 hospitals proved to be efficient. With respect to scale efficiency in the first 6 months of 2005, 7 hospitals were completely efficient (33.3%), but in the second 6 months of the same year, the number of efficient hospitals was reduced from 7 to 5. In the next two periods, 4 hospitals (19%) were recognized as highly efficient systems. As to the economic efficiency in all 4 studied periods, 4 hospitals (19%) were recognized as completely efficient. Conclusion: As to the average technical efficiency, state-run public hospitals in Fars Province are in a higher level as compared with those in other studies. However, their average of the scale efficiency is less than that reported in other studies. It seems that the hospitals under the study do not seek profitability since they are public; therefore, they lack any motivation to select a combination of inputs in order to minimize the expenses. It is recommended that hospital managers and decision makers should use DEA to determine the best method of using the available resources.