Decomposing Organizational Productivity Changes in Acute Care Hospitals in Tennessee, 2002-2006: A Malmquist Approach
Decomposing Organizational Productivity Changes in Acute Care Hospitals in Tennessee, 2002-2006: A Malmquist
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After the passage of the Patient Protection and Affordable Care Act,the survival and the productivity of hospitals are a critical topic in health caremanagement. This study measured the productivity of acute care hospitals inTennessee, applying the DEA-Malmquist index, which can be decomposed intoa technical efficiency and technological change index in relation to factors suchas size, ownership, location, and network. This draws on utilization data andfinancial statements from 144 acute care hospitals in Tennessee from 2002through 2006. The analysis indicates that community hospitals in Tennesseewere generally inefficient. The community hospitals in Tennessee suffered bothwith respect to technological change and technical efficiency, with the latterplaying a relatively more important role. This study finds the bigger-sized,urban, public or nonprofit, strategically allied hospitals to be more productiverelatively speaking and suggests that community hospitals in Tennessee need toupsize their facilities or make other adjustments, such as changing their coststructure and the way they operate their facility or bringing in new managementto increase productivity. Government and health policy makers also need todevelop and enact health policies to ensure that hospitals are both able to maketechnical progress and improve efficiency and thereby increase productivity.
Abstract
After the passage of the Patient Protection and Affordable Care Act,the survival and the productivity of hospitals are a critical topic in health caremanagement. This study measured the productivity of acute care hospitals inTennessee, applying the DEA-Malmquist index, which can be decomposed intoa technical efficiency and technological change index in relation to factors suchas size, ownership, location, and network. This draws on utilization data andfinancial statements from 144 acute care hospitals in Tennessee from 2002through 2006. The analysis indicates that community hospitals in Tennesseewere generally inefficient. The community hospitals in Tennessee suffered bothwith respect to technological change and technical efficiency, with the latterplaying a relatively more important role. This study finds the bigger-sized,urban, public or nonprofit, strategically allied hospitals to be more productiverelatively speaking and suggests that community hospitals in Tennessee need toupsize their facilities or make other adjustments, such as changing their coststructure and the way they operate their facility or bringing in new managementto increase productivity. Government and health policy makers also need todevelop and enact health policies to ensure that hospitals are both able to maketechnical progress and improve efficiency and thereby increase productivity.
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