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Measuring Hospital Performance through Data Envelopment Analysis

Understanding Basic Concepts to Help Novice Researchers

P.R. Sodani is Associate Professor, Indian Institute of Health Management Research, 1 Prabhu Dayal Marg, Sanganer Airport, Jaipur 302011. E-mail: prsodani{at}yahoo.com

G.M.K. Madnani

G.M.K. Madnani is Professor Emeritus of Management, Pacific Institute of Management, Post Box No.12, Pratap Nagar Extension, Airport Road, Udaipur, Rajasthan.

Attempting to assess the performance of organisations that are health service providers is not only a difficult task, but also requires specialised evaluation techniques because of the non-parametric measurable characteristics of their product. Data envelopment analysis (DEA) is a unique technique used for studying the comparative operating efficiency of an organisation in terms of scale and technical efficiencies that are beyond the scope of conventional measures of performance. The knowledge of these efficiencies reveal those ‘black spots’ that can then be targeted for improvement. Though being a very powerful methodology for evaluation of health service providers, DEA is not observed to have attracted the interest of research scholars and professionals working in the field of health care. Perhaps, it may be because of incomprehensible mathematical derivations that seldom provide insight as to how, why and what is actually happening in the shadows of such complicated manipulations. The purpose of this article is merely to unwind the minutely spun structure of the model and provide researchers a ‘feel’ for the hidden fibres of operating efficiencies that are at the very core of DEA model. By doing so we hope to help novice researchers in the field of health care, who are less accustomed with quantitative techniques, yet are more alive and knowledgeable about the concepts dealt in this methodology.

Journal of Health Management, Vol. 10, No. 1, 129-142 (2008)
DOI: 10.1177/097206340701000108


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