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Efficacy Determinant
Efficacy Determinant
Efficacy Determinant
DOI 10.1007/s10729-013-9249-8
Received: 8 February 2013 / Accepted: 22 July 2013 / Published online: 4 August 2013
# Springer Science+Business Media New York 2013
Abstract This paper reports on the use of different approaches stood at 45.7 %.1 Regardless of the rising costs, there is a
for assessing efficiency of a sample of major Brazilian for- deterioration in the quality of services and a large mass of
profit hospitals. Starting out with the bootstrapping technique, underserved, since public services are not able to adequately
several DEA estimates were generated, allowing the use of serve the country’s population totaling approximately 195
confidence intervals and bias correction in central estimates to million people in 2011, 10 % of whom (19.5 million) were
test for significant differences in efficiency levels and input- over the age of 60 years then.2
decreasing/output-increasing potentials. The findings indicate The health care sector in Brazil is divided into the public
that efficiency is mixed in Brazilian for-profit hospitals. Op- and private systems, and all Brazilians have free access to
portunities for accommodating future demand appear to be health care through the Unified Health System (Sistema Único
scarce and strongly dependent on particular conditions related de Saúde, or SUS). SUS offers free health services through
to the accreditation and specialization of a given hospital. public institutions at the federal, state and municipal levels, as
well as private institutions, which provide services to SUS
Keywords For-profit hospitals . DEA . Bootstrap . Brazil . through agreements with public agencies. In 2013, Brazil had
Efficiency 4,812 private hospitals, which corresponds to 70 % of the
6,875 Brazilian hospitals.3
The inefficiency of the Brazilian public hospitals has been
1 Introduction widely reported by previous research [1–3], but very few
studies have been devoted to the study of the efficiency of
In Brazil, the total per capita spending on healthcare grew Brazilian private hospitals. Therefore, this paper helps to close
102.8 % between 1999 and 2009, reaching $ 900.00 in 2010, this gap by presenting a benchmark and efficiency analysis of
while health spending accounted for only 8.4 % of GDP in 20 major Brazilian private for-profit hospitals belonging to
2010. In 2009, health plans bore 41.2 % of private expenditure largest health-care provider corporations in Brazil. A comple-
on health, while the Brazilian government health spending mentary approach is used for measuring the efficiency levels
of these hospitals and for characterizing their returns to scale
condition: Data Envelopment Analysis (DEA) in its envelop-
C. Araújo ment and multiplicative forms, respectively.
Center for Studies in Healthcare Services, COPPEAD Graduate Despite the increased use of DEA to measure the efficiency of
Business School, Federal University of Rio de Janeiro, hospitals over the last decade, there are still few studies that also
Rio de Janeiro, Brazil
e-mail: claraujo@coppead.ufrj.br exploit bootstrapping methodology to account for measurement
errors in estimates within this particular sector, such as Proite and
C. P. Barros (*) Sousa [4], Staat [5], and Tiemann and Schreyögg [6, 7]. Initially
Technical University of Lisbon, Lisbon, Portugal
e-mail: cbarros@iseg.utl.pt
1
World Health Organization 2011: site http://apps.who.int/ghodata/?
P. Wanke theme=country#. Access in 09/12/2012.
2
Center for Studies in Logistics, Infrastructure and Management, World Health Organization 2011: site http://apps.who.int/ghodata/?
COPPEAD Graduate Business School, Federal University of Rio de theme=country#. Access in 09/12/2012.
3
Janeiro, Rio de Janeiro, Brazil Ministry of Health, DATASUS 2013: site http://cnes.datasus.gov.br/.
e-mail: peter@coppead.ufrj.br Access in 05/08/2013.
Efficiency determinants and capacity issues in Brazilian 127
introduced by Simar and Wilson [8, 9], bootstrapping allows the USA and Germany suggests that private ownership
sensitivity analyses on efficiency scores and slacks, as well as on (i.e., private NFP and private FP) is not necessarily asso-
other scaling indicators, to be performed by repeatedly sampling ciated with higher efficiency when compared to public
from the original data. ownership [6]. Tiemann and Schreyögg [6, 7] researched
This paper uses the bootstrapping methodology to test, 1046 German hospitals and identified that public hospitals
among other things, for the presence of scale inefficiency–input performed significantly better than private FP and NFP
and output slacks–at different Brazilian for-profit hospitals. Its hospitals. The results suggest that public hospitals focus
contribution lies in an empirical application, inspired by the mainly on input efficiency because of their resource limi-
current debate in the Brazilian healthcare sector, in which there tations. In a previous study conducted in Germany, Helmig
is a capacity shortfall: between 2005 and 2012, the number of and Lapsley [18] concluded that public hospitals are more
hospital beds in Brazil decreased 40,5 %, resulting in 505,906 efficient because they use relatively fewer resources than
beds in 2013 (2.4 beds/1000 inhabitants).4 Furthermore, the private hospitals do. By studying 1170 Brazilian hospitals,
capacity shortage resulted from a combination of factors, includ- 852 private and 319 public, Proite and Souza [4] also
ing doctor and nurse shortage, population growth, and aging concluded that public hospitals tend to be more efficient
population, as shown by the numbers above. Another contribu- than private FP and NFP hospitals.
tion of this paper is to deepen the discussion about issues still In this sense, Lee, Yang, and Choi [42] defend that NFP
controversial in the literature, such as the effects of hospital hospitals behave similarly to FP, since the former have been
accreditation, age, and specialization on the efficiency levels. struggling with cost reduction efforts. Their research in hos-
pitals in Florida (USA) indicates that NFP hospitals were
more efficient than FP hospitals for all 4 years examined in
2 Literature review this study. According to these authors, this result can be
explained by the hospital size: a larger organization can pursue
This section presents the background of DEA-based studies a variety of managerial strategies to improve efficiency.
on hospital efficiency measurement around the world. In each However, there is no consensus on the greater efficiency of
one of its subsections, different efficiency determinants are public hospitals in relation to private ones. Burgess and Wilson
thus revisited: ownership and profit focus, size, accreditation, [43] applied DEA in a study conducted in the USA to analyze
and specialization. whether the ownership structures–NFP, FP, federal, state, and
local government hospitals–differ in terms of their technical
2.1 Background ability to convert inputs into outputs. The results of their
research indicate that FP are more efficient than NFP hospitals.
Since the 90’s there have been a growing number of studies to The authors argue that NFP hospitals tend to have managers
benchmark hospital efficiency [10–12]. Initially, DEA was more committed to providing high-quality service than to
applied mainly in studies conducted in the USA [10], but from generating profit. Therefore, these managers might use more
the following decade on, a significant number of studies inputs to produce the same outputs than FP hospitals. Besides,
conducted in other countries have appeared, such as in Austria they may be less concerned about waste in the production
[13], Greece [14, 15], Italy [16, 17], Germany [5, 6, 18, 19], process. Also, Hu et al. [44] affirm that due to more invest-
Spain [20, 21], Norway and Finland [22, 23], Portugal [24, ments in medical technologies, FP hospitals are generally more
25], Turkey [26–28], China [29, 30], India [31, 32], Botswana efficient than NFP hospitals. Equally, some studies conducted
[33], Iran [34, 35], Korea [36], and so on. in Taiwan indicate that public hospitals have lower operational
In Brazil, the methodology started to be applied more efficiency than private hospitals [45, 46]. According to Hu and
recently, in general investigating public and university hospi- Huang [45], public ownership significantly worsens a hospi-
tals [1, 2, 37–39]. There is, however, a lack of studies focusing tal’s efficiency. Moreover, Grosskopf et al. [47] suggest that
on Brazilian private for-profit hospitals. private hospitals use fewer inputs to produce outputs, when
compared with public hospitals. This being the case, such a
2.2 Ownership and profit focus fact makes private hospitals more efficient than public ones.
Comparing public and private hospitals, the evidence from 2.3 Size
studies conducted by Hollingsworth [40, 41] indicate that pub-
lic hospitals have a higher mean efficiency score than private Some studies suggest a positive association between hospital
NFP and private FP hospitals. Likewise, studies conducted in size and efficiency [4, 6, 48, 49]. The results of the research
conducted by Hu and Huang [45] suggest that increasing the
4
Ministry of Health, DATASUS 2013: site http://cnes.datasus.gov.br/. number of beds improves hospital efficiency, but there should
Access in 05/08/2013. be a balance between capacity and utilization. Likewise,
128 C. Araújo et al.
Rahman [47] argues that the greater the number of nurses per provided by the largest private health-care provider corpora-
bed in a hospital, the greater its efficiency. tion in Brazil, with a market share of approximately 10,1 % in
terms of number of enrollees, 6,3 million members, and total
2.4 Accreditation net revenue from services of $ 5.2 billion5.
As regards the input/output variables used, readers should
Accreditation can be defined as a process that a health care recall that one of the aims of the paper is to assess the input
institution undergoes to demonstrate compliance with stan- slacks in Brazilian private for-profit hospitals, as well as their
dards developed by an official agency. A professional associ- output-increasing potentials. The nine inputs originally col-
ation or nongovernmental agency grants recognition to a lected from each hospital are: (i) hospital area (m2), (ii) num-
health care institution that meets the established standards. ber of intensive care units beds (ICU beds), (iii) number of
Hospital accreditation in Brazil is voluntary. emergency beds, (iv) total number of hospital beds, (v) total
Some studies indicate that accredited hospitals tend to be number of staff, (vi) number of doctors, (vii) number of
more efficient than those that are not [48, 50]. Wei et al. [50] nurses, (viii) number of doctor’s offices in the hospital, and
argue that accredited hospitals tend to be more efficient than (ix) number of surgical rooms. According to Ozcan [12], these
those that are not, since the former usually make great invest- variables reflect the some of the usual inputs for hospitals:
ment in research and development. In turn, some authors ques- human resources and capital (beds). With respect to the out-
tion whether or not accreditation actually has a positive impact puts, five variables were collected: (i) number of ordinary
on efficiency [47, 51]. Alexander et al. [51] affirm that the inpatients (per year), (ii) number of ICU inpatients (per year),
accreditation demands additional staff for bureaucratic activities (iii) number of emergency inpatients (per year), (iv) total
which would decrease the hospital efficiency. Grosskopf et al. number of outpatient treatments (per year), and (v) number
[47] argue that the higher investments in equipment and re- of surgeries (per year). Descriptive statistics for each input and
sources required to treat the patients (inputs) can lead to ineffi- output are respectively presented in Table 1.
ciency in accredited hospitals. Furthermore, the results of the Contextual variables presented in Table 1 relate to the hospital
research conducted by Grosskopf et al. [47] to assess the per- type: specialized (1) or non-specialized (0); accredited (1) or
formance of US teaching hospitals suggest that if the hospital non-accredited (0); complexity level of the medical procedures
has a mix of high complexity services (tertiary hospitals, for performed (1 = low–primary health centers; 2 = medium;–
example), this can lead to inefficiency. On the other hand, Lee, outpatient clinics; 3 = high–outpatient specialty and hospitals);
Yang, and Choi [42] argue that the greater the number of and hospital age. Besides the variables previously mentioned in
services delivered (i.e., higher service complexity) the greater section 2, such as accreditation and specialization, Grosskopf
the economics-of-scale, which increases the hospital efficiency. et al. [47] relate the complexity level of the medical procedures
performed with the hospital efficiency and affirm that the higher
2.5 Specialization the complexity level, the lower the efficiency. Rahman [48], in
turn, concluded that older hospitals tend to be less efficient
Specialty hospitals provide a limited range of medical proce- because of bureaucracy.
dures, such as cancer specialty hospitals, and specialty hospi-
tals focusing on cardiac, orthopedic, or neurological proce- 3.2 Data envelopment analysis
dures. Regarding specialization, Lee et al. [52] argue that
specialized hospitals are more likely to be efficient, since they 3.2.1 Background
may gain advantage over their competitors in that specific
area. On the other hand, Proite and Sousa [4] affirm that the DEA is a non-parametric model first introduced by Charnes
excessive specialization of institutions may have negative et al. [53]. It is based on linear programming (LP) and is used
effects on efficiency, since these hospitals tend to lengthen to address the problem of calculating relative efficiency for a
the patient’s stay. As a matter of fact, Proite and Sousa [4] group of DMUs by using multiple measures of inputs and
suggest that hospitals should seek an optimal combination outputs. Given a set of DMUs, inputs, and outputs, DEA
between specialization and generalization. determines for each DMU a measure of efficiency obtained
as a ratio of weighted outputs to weighted inputs.
Consider a set of n observations on the DMUs. Each
3 Methodology observation, DMUj (j=1, …, n) uses m inputs xij (i=1,
…, m) to produce s outputs yrj (r=1, …, s). DMUo
3.1 The data represents one of the n DMUs under evaluation, and xio
Number of surgical
(1 = yes/0 = no)
and yro are the ith input and rth output for DMUo,
respectively. Table 2 presents the envelopment model for the
Accredited
hospital
VRS frontier type [54, 55]. Also presented is the DEA model in
rooms its multiplicative form.
14.0
6.5
3.0
2.7
0.4
1.0
An output maximization orientation is adopted here.
–
Under these circumstances, decision-makers should at-
Specialized hospital
(1 = yes/0 = no)
tempt to maximize production outputs for a given level
Number of doctor
1.0
–
–
inputs or outputs. Since the main objective of private
Complexity
level
2.0
0.7
3.0
44–46, 55].
Number of
doctors
(years)
Hospital
71.0
6.0
1.1
6.0
(per year)
19,108.0
11,467.0
6,855.9
4,073.6
185.0
952.0
0.6
Total number of
hospital beds
outpatients
64,169.0
20,412.6
303.0
128.7
1.5
Number of emergency
outputs.
However, a systematic statistical method for deciding
which of the original correlated variables can be omitted with
102,378.8
254,600.0
73,585.9
2.0
0.7
Number of ICU
7,452.0
beds
70.0
29.2
0.7
1.0
Number of ordinary
(per year)
inpatients
16,103.1
27,000.0
15,061.6
70,897.0
10,483.3
Outputs
7,845.0
2,028.0
then they can replace the original variables without much loss
Inputs
10.1
0.7
1.1
of information.
When comparing PCA and variable reduction based on
Standard deviation
Standard deviation
Coefficient of
Descriptives
variation
variation
Maximum
Maximum
Minimum
Minimum
Mean
ur ; vi ≥0; vo ¼ 0
n
Varying Returns to Scale (VRS), vo free in sign
also known as BCC Add ∑ λ j ¼ 1
j¼1
the targets and the efficient peers obtained might reflect a 3.3 Bootstrapped truncated regression
substantial change in the current mix of input–output levels
of the inefficient DMU’s [63]. Since problems related to The approaches to the statistical treatment of the variations in
discrimination often arise, there is a need to trade-off between the efficiency estimates produced using DEA–CCR, BCC, or
using complete DEA information and improving discrimina- SE–have evolved over the course of the years; see, for exam-
tion [64, 65]. ple, Banker [69] and Simar and Wilson [70, 71]. As a depic-
In this study, PCA was used to determine the most relevant tion of this evolution, Cooper et al. [72] point to the growing
inputs and outputs by means of factor extraction. In other number of studies that combine DEA scores obtained in a first
words, PCA allowed the identification of the most represen- stage with those of multivariate data analysis (such as regres-
tative inputs and outputs within each factor by looking at their sion analysis) in a second stage, when the scores are incorpo-
factor loads. According to Tabachnick and Fidel [66], only rated in the form of the dependent variable.
factor loads greater than 0.50 deserve to be interpreted, and in Simar and Wilson [70] argue that truncated regression
these cases the variable is said to represent a good factor combined with bootstrapping as a re-sampling technique best
measure. overcomes the unknown serial correlation complicating the
two-stage analysis. The adequacy of the functional form to the
3.2.3 Bootstrapping data is a prevalent problem and a common critique on the
stochastic frontier models, as seen in Khumbakar and Lovell
Nonparametric efficiency estimators such as Data Envel- [73]. In this research, the Simar and Wilson [70] approach is
opment Analysis (DEA) typically rely on linear program- employed and the following regression specification is as-
ming techniques for computation of estimates, and are sumed and tested:
often characterized as deterministic, as if to suggest that
the methods lack any statistical underpinnings [9]. Ap- E j ¼ a þ Z j δ þ ε j ; j ¼ 1; …:; n; ð1Þ
plied studies that have used these methods have typically
presented point estimates of inefficiency, with no measure
or even discussion of uncertainty surrounding these esti- which can be understood as the first-order approximation of
mates [67]. the unknown true relationship. In Eq. (1), a is the constant
The method used in this research departs from that term, εj is statistical noise, and Zj is a row (vector) of
presented by Simar and Wilson [9], who adapted the bootstrap observation-specific variables for DMU j that is expected to
methodology to the case of DEA efficiency estimators and be related to the DMU’s efficiency score, Ej, which may
uses a Gaussian kernel density function for random data represent, as will be seen later on, BCC, CCR, or even scale
generation. All the computations were carried out with Maple efficiency (SE) scores.
codes developed by the authors; 1,000 bootstrap replications Specifically, noting that the distribution of εj is restricted by
were performed on models (1) and (2), following the discus- the condition εj ≥1−a−Zjδ (since both sides of (1) are bounded
sion presented by Simar and Wilson [8, 9] and Curi et al. [68] by unit), Simar and Wilson [70] is followed here and it is
on deriving statistical properties for each hospital vis-à-vis assumed that this distribution is truncated normal with zero
bias estimation, central tendency correction, and confidence mean (before truncation), unknown variance, and (left) trunca-
intervals (CIs). tion point determined by this very condition.
Efficiency determinants and capacity issues in Brazilian 131
Furthermore, replacing the true but unobserved regressand variable could be considered as a proxy for the behavior of
in (1), Ej, by its DEA estimate, E j , the econometric model the remainder variables within each factor, since these vari-
formally becomes: ables tend to be strongly correlated with each other.
efficient level. It should be noted that efficient DMUs tend not relies for its efficiency rating mostly on the hospital area
to present any slack and this information is reported solely for (62.3 %), as regards the virtual inputs, and on the ICU inpa-
the inefficient DMUs. tients (57.3 %), as regards the virtual outputs. Results suggest
The BCC model results for the inefficient DMUs, as well as that high complexity, specialized units tend to rely mostly on
the facet terminal numbers and associated lambdas (in these virtual input and output. On the contrary, low complex-
brackets) are presented in Table 4. All lambdas add up to ity and non-specialized units derive its efficiency levels from
one as a result of the convexity constraint, and, therefore, they doctor’s offices, as regards the virtual inputs, and total number
may be interpreted as relative weights. Higher lambda values of outpatient treatments, as regards the virtual outputs. It is
indicate which efficient terminal was more important in de- very important to note, however, that the existence of multiple
termining the inefficiency of a particular DMU. For instance, optimal solutions to the model does not necessarily mean that
for Hospital ABC (DMU #12), Hospital Mario Lioni presents the specific DMU cannot have a high virtual level on that
the highest weight in the facet (0.60), followed in sequence by input or output in some other optimal solution to the model.
CS Santa Lucia (0.27), and Hospital Vitoria (0.13). It is Results for the bias-corrected input and output slacks for
interesting to note that Hospital Mario Lione, which is the major Brazilian for-profit hospitals are presented in detail
accredited but not specialized and presents a low complexity in Table 5. Available input-decreasing and output-increasing
level, is appears the greatest number of times (13 out of 20) as potentials were also calculated in percent terms, dividing each
the efficient peer with highest weight. On the other hand, well- corrected slack by the respective input/output index.
known referenced hospitals in terms of handling complex One can easily appreciate that, in many cases, the avail-
procedures and specialization, such as CS Santa Lucia, Pró- able hospital area and doctor’s offices to meet future de-
Cardíaco, and TotalCor, appear only a small number of times mand growth are negligible, although the former are not as
(3 out of 20) as the efficient peer with highest weight, always so severely restricted as the later. More precisely, some
referencing themselves. hospitals in Rio de Janeiro and São Paulo, such as Pró-
According to Thanassoulis [77], the virtual input and out- Cardíaco, Pasteur, Samaritano, TotalCor, Santa Lúcia, and
put levels reflect the extent to which the efficiency rating of a Alvorada, present virtually no input slacks in terms of the
Pareto-efficient DMU is underscored by each one of its inputs number of doctor’s offices, taken current demand levels as
and output levels. On average, the hospitals in the sample a basis for comparison.
Table 4 Initial and bootstrapped efficiency estimates
DMU Initial estimates Lambdas (BCC frontier) Peers Bootstrap corrected Virtual inputs/outputs
estimates (BCC frontier)
HC Padre Miguel 0.39 0.38 0.96 0.54 0 .08 – – 0.38 – 1.00 HC Mário Lioni H TotalCor H Vitória 0.32 0.29 0.92 0.41 0.59 1.00 – 1.00 1.00
HC Mário Lioni 1.00 1.00 1.00 1.00 – – – – – 1.00 HC Mário Lioni – – 0.68 0.58 0.86 1.00 0.00 1.00 1.00 – 1.00
Efficiency determinants and capacity issues in Brazilian
H TotalCor 1.00 0.22 0.22 – 1 .00 – – – – 1.00 H TotalCor – – 0.98 0.33 0.34 0.99 0.01 1.00 1.00 – 1.00
H Pró-Cardíaco 1.00 1.00 1.00 – – 1 .00 – – – 1.00 H Pró-Cardíaco – – 0.98 0.74 0.75 1.00 0.00 1.00 1.00 – 1.00
H Santa Paula 0.21 0.15 0.72 1.00 – – – – – 1.00 HC Mário Lioni – – 0.18 0.15 0.82 0.50 0.50 1.00 1.00 – 1.00
CS Santa Lúcia 1.00 1.00 1.00 – – – 1.00 – – 1.00 CS Santa Lúcia – – 0.91 0.83 0.91 0.10 0.90 1.00 1.00 – 1.00
H Pasteur 0.18 0.06 0.33 – – – 1.00 – – 1.00 CS Santa Lúcia – – 0.24 0.13 0.53 0.00 1.00 1.00 – 1.00 1.00
H Vitória 1.00 1.00 1.00 – – – – 1.00 – 1.00 H Vitória – – 0.98 0.95 0.96 0.99 0.01 1.00 1.00 – 1.00
H Nove de Julho 0.82 0.38 0.46 0.40 – – – – 0.60 1.00 HC Mário Lioni HM Ipiranga 0.46 0.28 0.60 0.50 0.50 1.00 0.21 0.79 1.00
H Alvorada - SP 0.67 0.17 0.26 – – – 1.00 – – 1.00 CS Santa Lúcia – – 0.57 0.27 0.48 0.00 1.00 1.00 – 1.00 1.00
HM Ipiranga 1.00 1.00 1.00 0.00 – – – – 1.00 1.00 HC Mário Lioni HM Ipiranga 0.55 0.44 0.80 1.00 0.00 1.00 – 1.00 1.00
(Mogi das Cruzes)
H ABC Materno Infantil 0.01 0.01 1.00 0.13 – – 0.27 0.60 – 1.00 HC Mário Lioni CS Santa Lúcia H Vitória 0.01 0.01 1.00 0.97 0.03 1.00 1.00 – 1.00
H Metropolitano Butantã 0.69 0.42 0.61 1.00 – – – – – 1.00 HC Mário Lioni – – 0.40 0.28 0.70 0.50 0.50 1.00 1.00 – 1.00
HC Caieiras 0.79 0.64 0.81 0.03 – – – 0.53 0.44 1.00 HC Mário Lioni H Vitória HM Ipiranga 0.41 0.34 0.81 1.00 0.00 1.00 0.05 0.95 1.00
HM Metropolitano 0.97 0.90 0.93 0.21 – – – – 0.79 1.00 HC Mário Lioni HM Ipiranga – 0.54 0.42 0.78 0.50 0.50 1.00 0.14 0.86 1.00
H ABC 0.13 0.11 0.85 0.59 – – – 0.41 – 1.00 HC Mário Lioni H Vitória – 0.14 0.13 0.93 1.00 0.00 1.00 1.00 – 1.00
H Paulistano 0.63 0.21 0.34 1.00 – – – – – 1.00 HC Mário Lioni – – 0.34 0.20 0.58 0.50 0.50 1.00 1.00 – 1.00
H Samaritano 0.12 0.04 0.36 – – – 1.00 – – 1.00 CS Santa Lúcia – – 0.17 0.10 0.56 0.00 1.00 1.00 – 1.00 1.00
H Alvorada–DF 0.48 0.35 0.72 0.04 – – – 0.50 0.46 1.00 HC Mário Lioni H Vitória HM Ipiranga 0.29 0.23 0.78 1.00 0.00 1.00 0.05 0.95 1.00
HC Niterói 0.26 0.11 0.41 1.00 – – – – – 1.00 HC Mário Lioni – – 0.19 0.15 0.75 0.50 0.50 1.00 1.00 – 1.00
133
134
Hospital Hospital area (sq. m) Number of doctor offices Number of ICU inpatients (per year) Total number of outpatients (per year)
Corrected Available hospital area to Corrected Available doctor offices to Corrected Increasing potential for ICU Corrected Increasing potential for
slack meet future demand growth slack meet future demand growth slack inpatients if current resources slack outpatients if current resources
given current efficiency levels given current efficiency levels were efficiently used were efficiently used
(corrected, in %) (corrected, in %) (corrected, in %) (corrected, in %)
On the other hand, when the bias-corrected estimates for hospital production outputs and, therefore, efficiency, giv-
the output-increasing potentials are put into perspective, the en a certain level of inputs. Hospitals could benefit, for
opportunities for accommodating future demand growth are instance, from receiving additional outpatients from SUS,
severely restricted in the great majority of hospitals, especially the public Brazilian health-care system. Of course, the
with respect to ICU inpatients. Among the hospitals in Rio de complexity and specialization of the medical procedure
Janeiro and São Paulo, none of them could comfortably han- would be of paramount importance in attracting such ad-
dle a significant increase in additional longer-term procedures. ditional patients.
It is also noteworthy that, although the relative potential for
increasing outputs appears to be greater as regards outpatient 4.3 Efficiency determinants
treatments rather ICU inpatients, healthcare planners should
take a closer look based on the characteristics of demand for As far as this dataset is concerned, following Simar and
such services. The full picture emerges when, at last, the Wilson [70], the bootstrapped truncated regression was
complexity and specialization of such procedures are ana- used for testing significant differences in efficiency esti-
lyzed. It appears to be severely restricted in high-complexity, mates (cf. Table 6). Specialization presented a significant,
specialized for-profit hospitals, when compared to other low- negative impact on pure (CCR) efficiency levels, probably
complexity, non-specialized units, such as those of general due to the higher commitment of resources required by
purposes (e.g. Paulistano, Padre Miguel, and Metropolitano, medical procedures of such nature. These results are in
to name a few). line with previous research carried out by Proite and Sousa
The inference of future strategic actions based on the [4]. Surprising, however, is the fact that hospital age con-
conclusions of a slack analysis should, however, be conducted tributed significantly to increasing efficiency levels, unlike
with care, and its embedded within the choice of the model what was founded by Rahman [48]. Accreditation also
orientation. Essentially, one should select the DEA model showed a significant impact on pure efficiency levels, in
orientation according to which quantities (inputs or outputs) line with previous studies [48, 50]. Complexity, however,
the decision-makers have most control over, as discussed in despite its negative sign, did not impact significantly on
Coelli [78]. efficiency levels, different from Grosskopf et al. [47]
More precisely, according to Wanke et al. [79], the basic findings.
idea behind the selection of an input oriented model is that the Therefore, expansion priorities should be given to general
output increasing potential should be interpreted with more purpose hospitals. More precisely, they should have an in-
care, unless there is demand for it. So, when selecting an creased focus on receiving outpatients from SUS in order to
input-orientation, decision-makers are focusing on “stressing” augment their output levels. These procedures, however,
production inputs for a given level of output that may not should be low-specialized ones, helping to increase the pure
necessarily be maximal, as it is discussed in Odeck and Alkadi efficiency levels (CCR scores) of a given DMU. On the other
[80]. However, on the other hand, some hospital inputs tend to hand, priority in hospitals should be avoiding further special-
be fixed, as they may reflect long-term investments and ca- ization in order to prevent from diminishing current efficiency
pacitated staff, which are difficult to demobilize in the levels. An additional focus on increasing outpatients from
medium/short-terms, as it is elaborated in Cullinane et al. SUS, similarly as general purpose hospitals, should also be
[81]. Thus, in such cases, similarly as to this research, given, as long as accompanied by an expansion in the number
decision-makers should focus on maximizing outputs for a of doctor’s offices.
given level of production inputs (an output orientation is
preferable).
Table 6 Truncated bootstrapped two-stage regression
Therefore, this overall picture calls for an urgent capacity
expansion, as the current level of inputs (the scale variables in Models for corrected estimates
an output-oriented model according to Thanassoulis [77])
Independent variables BCC CCR SE
does not seem to accommodate future demand growth in
several DMUs. Firstly in terms of doctor’s offices–and subse- Constant 0.734 0.858 1.421***
quently in terms of hospital area–in order to accommodate Contextual Age 0.005 0.006* 0.003
future demand levels. The chronological sequence by which Complexity −0.049 −0.125 −0.206
this capacity expansion should occur is discussed next, based Specialized −0.121 −0.259* −0.119
on the results of the impact of contextual variables, also Accredited 0.303* 0.218* −0.005
providing some guidelines on what type of production output Variance of the model 0.038 *** 0.036 *** 0.033***
should be focused on first. Total number of observations 1000 1000 1000
Besides capacity expansion there are, however, short/
middle term actions that could be taken in order to increase ***,**,*, statistical significance at 1 %, 5 %, and 10 % respectively
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