Efficiency and productivity assessment of public hospitals in Greece during the crisis period 2009–2012

BACKGROUND This study is an initial effort to examine the dynamics of efficiency and productivity in Greek public hospitals during the first phase of the crisis 2009-2012. Data were collected by the Ministry of Health after several quality controls ensuring comparability and validity of hospital inputs and outputs. Productivity is estimated using the Malmquist Indicator, decomposing the estimated values into efficiency and technological change. METHODS Hospital efficiency and productivity growth are calculated by bootstrapping the non-parametric Malmquist analysis. The advantage of this method is the estimation efficiency and productivity through the corresponding confidence intervals. Additionally, a Random-effects Tobit model is explored to investigate the impact of contextual factors on the magnitude of efficiency. RESULTS Findings reveal substantial variations in hospital productivity over the period from 2009 to 2012. The economic crisis of 2009 had a negative impact in productivity. The average Malmquist Productivity Indicator (MPI) score is 0.72 with unity signifying stable production. Approximately 91% of the hospitals score lower than unity. Substantial increase is observed between 2010 and 2011, as indicated by the average MPI score which fluctuates to 1.52. Moreover, technology change scored more than unity in more than 75% of hospitals. The last period (2011-2012) has shown stabilization in the expansionary process of productivity. The main factors contributing to overall productivity gains are increases in occupancy rates, type and size of the hospital. CONCLUSIONS This paper attempts to offer insights in efficiency and productivity growth for public hospitals in Greece. The results suggest that the average hospital experienced substantial productivity growth between 2009 and 2012 as indicated by variations in MPI. Almost all of the productivity increase was due to technology change which could be explained by the concurrent managerial and financing healthcare reforms. Hospitals operating under decreasing returns to scale could achieve higher efficiency rates by reducing their capacity. However, certain social objectives should also be considered. Emphasis perhaps should be placed in utilizing and advancing managerial and organizational reforms, so that the benefits of technological improvements will have a continuing positive impact in the future.