Techinical and scale efficiency of district hospitals in Nepal : a data envelopment analysis approach

Abstract

The study aimed to measure technical and scale efficiency of district hospitals and to estimate the possible factors affecting on the efficiency of district hospitals in Nepal. Input oriented Data Envelopment Analysis (DEA) was employed to measure technical and scale efficiency of 56 district hospitals in the year 2009 and 2010. In the second stage, Tobit regression model was used to determine the factors that affect on efficiency. The DEA analysis revealed that 29 (51.79%) and 30 (53.57%) of the hospitals were run inefficiently in 2009, and 2010 respectively. The average variable returns to scale (VRS) technical efficiency scores were 89% and 90% respectively during two years. Most of the patterns of scale inefficiency were increasing return to scale. The result of Tobit regression revealed that hospitals with higher occupancy rates and higher outpatient per physician perform better than those with lower occupancy rates. The bed physician ratio is positively and nurse physician ratio is negatively significant. Similarly bed occupancy rates, no. of beds, outpatient physician ratio are associated with scale efficiency. Hospitals in mountain region are significantly less scale efficient than others.