Efficiency Analysis of Health Care Facilities in Ibadan, Nigeria: A Data Envelopment Analysis Approach

Abstract

Background: With paucity of resources and competitive challenges, the need for efficient utilization of available quantum of resources by the sectors of the economy including health is being emphasized. Efficiency of resource utilization tends to focus more on hospital operations, since they account for the bulk resources in the health sector. The objective of this study were (a) to estimate the relative technical and scale efficiency of hospitals in Ibadan in Oyo State, based on data for 2010-2012, and (b) to estimate the magnitudes of input reductions and/or output increases that would have been required to make relatively inefficient hospitals more efficient.
Methods: A Data Envelopment Analysis (DEA) method is used to estimate efficiency of the hospitals and to explain the inefficiencies. The efficient frontier and the hospital-level efficiency scores are estimated using DEA. The methodology tries to evolve the criterion from within the decision-making units rather than imposition from outside. The input (number of physicians, nurses, and beds) and output (maternal and child care, inpatients and outpatients) data were used in the estimating the efficiency scores to illustrate the potential value of such efficiency analyses.
Results: The key findings are as follows: (i) the average pure technical efficiency of the hospitals consistently declined over the years, as the efficiency scores were 72.8%, 68.2% and 65.1% for years 2010, 2011, and 2012 respectively; (ii) between 31% and 33% of the hospitals operated within technical efficiency range of 0.50 and less than 0.90, while between 33% and 46% of the hospitals operated within the technical efficiency score of greater than 0.90; and (iii) on the average between 2010 and 2012, the inefficient hospitals could have become more efficient by either increasing their outputs by 1524 (2.7%) inpatients admissions, 65,333 (12.3%) outpatient visits, and 8621 (10.3%) maternal and child care, or by transferring the excess 11 (1%) physicians, 23 (1%) nurses, 47 (3%) to other types of health facilities.
Conclusions: The existence of inefficiency resource slack among some of the HCFs is a pointer to the fact the available resources can be better utilized to positively impact the health of the population than applied in those years. Policy actions are required to explore the full potential of the services the available resources can provide. The hardship of dwindling resources can be minimized by improving the efficient use of allocated resources by hospitals.