A model to measure the efficiency of hospital performance

The establishment of specific and thoroughly researched criteria to evaluate hospitals’ activity is very important because there is a huge and increasing amount of public resources dedicated to healthcare. Therefore, it is necessary to design a system to evaluate healthcare performance in order to discover and improve potential inefficiencies. With this goal in mind, the purpose of this paper is to analyse efficiency in three healthcare service units in Valencian hospitals to establish appropriate guidelines for efficiency performance. Three healthcare service units of 22 hospitals in the Valencian Community (East Spain) with a waiting list higher than average were selected (general surgery, ophthalmology, traumatology–orthopaedic surgery). In this study, a non-parametric methodology, known as theDEAmodel (Data Envelopment Analysis), was used alongwith two efficiency indexes whichwere specially designed. Discriminant analyses proved the effectiveness of these two indexes, therefore the indicators are an easier and effective methodology for measuring efficiency than theDEAModel. In addition, the discriminant analysis offers a functionwhich classifies new health services as efficient or inefficient. In conclusion, this paper offers tools for evaluating the performance of hospital activity which are useful for both hospital management and health administration controlling hospital performance. © 2010 Elsevier Ltd. All rights reserved.