Assessment of productivity of hospitals in Botswana: A DEA application

Abstract

Botswana national health policy states that the Ministry of Health shall from time to time review and revise its organization and management structures to respond to new developments and challenges in order to achieve and sustain a high level of efficiency in the provision of health care. Even though the government clearly views assuring efficiency in the health sector as one of its leadership and governance responsibilities, to date no study has been undertaken to measure the technical efficiency of hospitals which consume the majority of health sector resources. The specific objectives of this study were to quantify the technical and scale efficiency of hospitals in Botswana, and to evaluate changes in productivity over a three year period in order to analyze changes in efficiency and technology use.

DEAP software was used to analyze technical efficiency along with the DEA-based Malmquist productivity index which was applied to a sample of 21 non-teaching hospitals in the Republic of Botswana over a period of three years (2006 to 2008).

The analysis revealed that 16 (76.2 percent), 16 (76.2 percent) and 13 (61.9 percent) of the 21 hospitals were run inefficiently in 2006, 2007 and 2008, with average variable returns to scale (VRS) technical efficiency scores of 70.4 percent, 74.2 percent and 76.3 percent respectively. On average, Malmquist Total Factor Productivity (MTFP) decreased by 1.5 percent. Whilst hospital efficiency increased by 3.1 percent, technical change (innovation) regressed by 4.5 percent. Efficiency change was thus attributed to an improvement in pure efficiency of 4.2 percent and a decline in scale efficiency of 1 percent. The MTFP change was the highest in 2008 (MTFP = 1.008) and the lowest in 2007 (MTFP = 0.963).