Academic journal article Business and Economics Research Journal

The Technical Efficiency of Hospital Inpatient Care Services: An Application for Turkish Public Hospitals

Academic journal article Business and Economics Research Journal

The Technical Efficiency of Hospital Inpatient Care Services: An Application for Turkish Public Hospitals

Article excerpt

(ProQuest: ... denotes formulae omitted.)

1. Introduction

As in all other countries, health expenditure is also progressively increasing in Turkey. As is well known, the growth of health expenditure is related with aging of the society, increasing demand for health services created by income growth, epidemiological changes and especially with the use of advanced diagnostic and treatment methods. This process inevitably led the policy makers to provide tools to control the growth of health expenditure in countries such as Turkey, where the health services are substantially financed by public resources. Within the health services production units, the largest share of government health resources is consumed by the hospitals. Therefore the analysis of hospital efficiency and productivity in hospital services became a matter of priority for both researchers and policy makers as efficiency improvements in those services yield utmost important benefits for the health system and the public entirely.

In the last decade, the structure of Turkish health system has been changed evidently with the implementation of the Health Transformation Program (HTP), which was announced with the aim of achieving efficiency and effectiveness in the use of financial resources in health sector, by imposing reforms related to health care delivery, finance and human resources1. HTP was constructed on three main pillars. The first main pillar was the reforms regarding health care delivery and social security, i.e. all Social Insurance Organizations' (SII) health facilities were transferred to the Ministry of Health (MoH) which was then followed by the announcement of the General Health Insurance Program (GHIP) in 2008. The second main pillar was the establishment of family physicians in the primary health care scheme. The last one was the enactments of the Public Hospital Associations (PHA) in 2012, which are basically regional hospital unions.

Establishment of the PHAs introduced a new management model for Turkish public hospitals and their managers on the basis of institutional performance. Thus, in recent years, the hospital efficiency analysis that holds key for hospital performance assessment, is located at the core of Turkey Ministry of Health policy applications. The performance assessment of Turkish public hospitals are being done in a framework of the Balanced Score Card approach. In the performance assessment of these hospitals, SFA production efficiency analysis holds a key position. As briefly explained by Atilgan (2016), in in this assessment model, the efficiency scores are being estimated in four dimensions; that is hospital's outpatient, inpatient, surgery and emergency service productions. By using the Stochastic Frontier Analysis (SFA) method.

In this study, the efficiency analysis of Turkish public hospitals' inpatient care services is done by using SFA, with respect to a similar model that is used by MoH for hospital performance assessment. The main purpose of the study is to analyze the distribution of efficiency scores within the hospitals with respect to some key hospital characteristics, as well as assessing the environmental factors that affect the efficiency scores on the basis of regional differences. Accordingly, while being one of the rare examples of SFA hospital efficiency studies in Turkish case, this study also tries to contribute to the hospital efficiency literature by introducing one of the MoH's hospital efficiency assessment model in an analytical way with respect to theoretical basics.

The rest of the paper is organized as follows. In the second section, a literature review on hospital efficiency studies is given. In the third section, research design and methods are introduced with the model specifications and the data used in the analysis. In the section four, the results of the estimations are given. Then the paper concludes with discussions.

2. Literature Review

Since the pioneer study of Wagstaff (1989), who examined the efficiency of Spanish hospitals, a wide literature has been conducted on efficiency estimation of hospitals with SFA. …

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