PRODUCTIVITY CHANGE IN SUB-DIVISIONAL HOSPITALS IN FIJI

Abstract

The study aims to investigate the productivity and efficiency trends of Sub-Divisional Hospitals in Fiji since 2005 to 2014. The study is first of such nature in Fiji where an objective evaluation of the performance of Sub-Divisional Hospitals is investigated. The study is divided into two major parts .The first major part explores the use of the extended version of the Data Envelopment Analysis (DEA), the Malmquist Productivity Index to measure and evaluate the performances of the Sub-Divisional Hospitals in Fiji. The second part of the study applied the Multi Stage DEA programme to the most recent year data, 2014 to evaluate hospital performance in terms of technical and scale efficiency for the particular year. The results or scores of both parts of the study were then used as dependent variables and econometric models of a Log-Linear function and Tobit function were used to determine the key factors that were believed to have influenced the productivity and efficiency changes in Fiji's context. The results from the Malmquist Productivity Indices disclosed some concern in terms of the downward sloping trend of productivity over the period of the study. This meant that SDH's in Fiji were not utilising inputs efficiently which led to the inability of the Ministry to meet its targeted outputs. The trend in total factor productivity in summary of the period of the study fell from a positive gain in productivity of 36.3% in 2005-2006 period to a productivity loss of 14.3%. This was significantly attributed to the lowest change in technical efficiency which fell to a record low of negative score of 18.4% in the period 2013-2014. This was also reflected in the Technical Efficiency change scores where all 17 hospitals had scores below 1. The Multi Stage DEA under the output oriented model also had considerable variations of efficiency scores from the reference hospitals under the assumption of Constant and Variable Returns to scale.Only 2 out of the 17 hospitals under the study were operating on the optimal production frontier. Majority of the hospitals were producing outputs at a decreasing returns to scale implying that many hospitals were not using their inputs in the most efficient manner and needed to decrease investment in the production of outputs or they needed to produce more outputs within the inputs that was consumed.