The Impact of Non-discretionary Factors on DEA and SFA Technical Efficiency Differences

Overview

Journal J Med Syst

Specialty Medical Informatics

Date 2010 Aug 13

PMID 20703676

Citations 5

Authors

Nick Kontodimopoulos

Nikolaos D Papathanasiou

Angeliki Flokou

Yannis Tountas

Dimitris Niakas

Affiliations

Soon will be listed here.

Abstract

The purpose of this study was to examine if factors of the external operating environment can explain differences in technical efficiency derived from Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA). In a sample of 124 dialysis facilities, technical efficiency was compared according to ownership, region, years in operation and size. With second-stage Tobit regression, DEA and SFA efficiency was regressed against these environmental factors to determine their potential for predicting technical efficiency, as well as the efficiency differences between the two frontier methods. DEA expectedly generated lower mean efficiency scores than SFA (68.2% vs. 79.4%, P < 0.001), due to the "random effects" term computed by the latter, in addition to "true" inefficiency. This finding was consistent for the subgroups formed on the basis of the environmental factors. Half the variation in the DEA-SFA efficiency differences was explained by environmental factors. This suggests that in addition to market instabilities, luck, and other related phenomena, decision-makers in their effort to determine optimal resource allocation, should point their attention to the potentially useful insight provided by environmental factors.

Citing Articles

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Kang J, Peng R, Feng J, Wei J, Li Z, Huang F BMJ Open. 2023; 13(9):e075030.

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A Novel Hybrid Parametric and Non-Parametric Optimisation Model for Average Technical Efficiency Assessment in Public Hospitals during and Post-COVID-19 Pandemic.

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Measuring Efficiency of Secondary Healthcare Providers in Slovenia.

Blatnik P, Bojnec S, Tusak M Open Med (Wars). 2017; 12:214-225.

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Importance of Statistical Evidence in Estimating Valid DEA Scores.

Barnum D, Johnson M, Gleason J J Med Syst. 2015; 40(3):47.

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Frontier-based techniques in measuring hospital efficiency in Iran: a systematic review and meta-regression analysis.

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