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Assessing productivity changes in UK hospitals reflecting technology and input prices

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  • Nikolaos Maniadakis
  • Emmanuel Thanassoulis

Abstract

In this study Malmquist productivity indexes are used to evaluate the performance of acute hospitals in the UK over the period after the introduction of the internal market in the National Health Service in 1991. The indexes are computed using nonparametric programming, known as Data Envelopment Analysis, and they are decomposed into multiple component measures to give insights into the trends in hospital performance. Overall it is found that productivity regressed in the year after the reforms but progressed thereafter so that overall there was a net progress both as far as the inputs and costs are concerned. Productivity progress is mainly due to overall efficiency progress, which in turn is mostly attributed to allocative efficiency improvements. Technical change resulted in a small reduction in the amount of inputs used but also at higher production costs, because of a worsening in the match between input mixes and relative input prices. However, it is suggested that the gains in productivity are not high enough to argue that the internal market has had a significant impact on productivity. Finally, it is argued that the methodologies employed here can be a valuable evaluative and managerial tool in the context of the new NHS reforms about to be introduced.

Suggested Citation

  • Nikolaos Maniadakis & Emmanuel Thanassoulis, 2000. "Assessing productivity changes in UK hospitals reflecting technology and input prices," Applied Economics, Taylor & Francis Journals, vol. 32(12), pages 1575-1589.
    • Handle: RePEc:taf:applec:v:32:y:2000:i:12:p:1575-1589
    DOI: 10.1080/000368400418970
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    Cited by:

    1. Carlos Pestana Barros & António Gomes de Menezes & Jos頠 Cabral Vieira, 2013. "Measurement of hospital efficiency, using a latent class stochastic frontier model," Applied Economics, Taylor & Francis Journals, vol. 45(1), pages 47-54, January.
    2. N. Maniadakis & N. Kotsopoulos & P. Prezerakos & J. Yfantopoulos, 2009. "Health Care Services Performance Measurement: Theory, Methods and Empirical Evidence," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 151-170.
    3. Andrews Antony & Emvalomatis Grigorios, 2024. "Efficiency Measurement in Healthcare: The Foundations, Variables, and Models – A Narrative Literature Review," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 18(1), pages 1-24.
    4. Worthington, Andrew C. & Lee, Boon L., 2008. "Efficiency, technology and productivity change in Australian universities, 1998-2003," Economics of Education Review, Elsevier, vol. 27(3), pages 285-298, June.
    5. Karelys Guzmán-Finol, 2017. "¿Qué hay detrás de un cambio en la productividad hospitalaria?," Chapters, in: Jaime Bonet & Karelys Guzmán-Finol & Lucas Wilfried Hahn-De-Castro (ed.), La salud en Colombia: una perspectiva regional, chapter 7, pages 211-247, Banco de la Republica de Colombia.
    6. Bert M. Balk, 2016. "Various Approaches to the Aggregation of Economic Productivity Indices," Pacific Economic Review, Wiley Blackwell, vol. 21(4), pages 445-463, October.
    7. Galvis-Aponte Luis Armando & Hahn-De-Castro Lucas Wilfried, 2016. "Crecimiento municipal en Colombia: el papel de las externalidades espaciales, el capital humano y el capital físico," Revista Sociedad y Economía, Universidad del Valle, CIDSE, issue 31, pages 11-286, May.
    8. Balk, B.M. & Zofío, J.L., 2018. "The Many Decompositions of Total Factor Productivity Change," ERIM Report Series Research in Management ERS-2018-003-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    9. Ng, Ying Chu, 2011. "The productive efficiency of Chinese hospitals," China Economic Review, Elsevier, vol. 22(3), pages 428-439, September.
    10. Antonio José Orozco-Gallo, 2017. "Una aproximación regional a la eficiencia y productividad de los hospitales públicos colombianos," Chapters, in: Jaime Bonet & Karelys Guzmán-Finol & Lucas Wilfried Hahn-De-Castro (ed.), La salud en Colombia: una perspectiva regional, chapter 6, pages 173-209, Banco de la Republica de Colombia.
    11. N. Maniadakis & N. Kotsopoulos & P. Prezerakos & J. Yfantopoulos, 2008. "Measuring Intra-Hospital Clinic Efficiency and Productivity: Application to a Greek University General Hospital," European Research Studies Journal, European Research Studies Journal, vol. 0(1-2), pages 95-110.
    12. Dana Jašková, 2021. "Efficiency of management processes in a private hospital," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 9(1), pages 436-446, September.
    13. Nurhafiza Md Hamzah & Kok Fong See, 2019. "Technical efficiency and its influencing factors in Malaysian hospital pharmacy services," Health Care Management Science, Springer, vol. 22(3), pages 462-474, September.
    14. Dinesh R. Pai & Fatma Pakdil & Nasibeh Azadeh-Fard, 2024. "Applications of data envelopment analysis in acute care hospitals: a systematic literature review, 1984–2022," Health Care Management Science, Springer, vol. 27(2), pages 284-312, June.
    15. Kwaku Ohene-Asare & Jones Kofi Anyimadu Asare & Charles Turkson, 2019. "Dynamic cost productivity and economies of scale of Ghanaian insurers," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 44(1), pages 148-177, January.
    16. O'Neill, Liam & Rauner, Marion & Heidenberger, Kurt & Kraus, Markus, 2008. "A cross-national comparison and taxonomy of DEA-based hospital efficiency studies," Socio-Economic Planning Sciences, Elsevier, vol. 42(3), pages 158-189, September.
    17. Karelys Guzmán Finol, 2015. "¿Qué hay detrás de un cambio en la productividad hospitalaria?," Documentos de trabajo sobre Economía Regional y Urbana 215, Banco de la Republica de Colombia.
    18. Daniel Friesner & Matthew McPherson & Robert Rosenman, 2006. "Are Hospitals Seasonally Inefficient? Evidence from Washington State Hospitals," Working Papers 2006-3, School of Economic Sciences, Washington State University.
    19. Lorena Androutsou & Michail Kokkinos & Dimitra Latsou & Mary Geitona, 2022. "Assessing the Efficiency and Productivity of the Hospital Clinics on the Island of Rhodes during the COVID-19 Pandemic," IJERPH, MDPI, vol. 19(23), pages 1-12, November.
    20. Robert Stefko & Beata Gavurova & Kristina Kocisova, 2018. "Healthcare efficiency assessment using DEA analysis in the Slovak Republic," Health Economics Review, Springer, vol. 8(1), pages 1-12, December.
    21. Katharaki, Maria, 2008. "Approaching the management of hospital units with an operation research technique: The case of 32 Greek obstetric and gynaecology public units," Health Policy, Elsevier, vol. 85(1), pages 19-31, January.
    22. Thanassoulis, Emmanuel & Shiraz, Rashed Khanjani & Maniadakis, Nikolaos, 2015. "A cost Malmquist productivity index capturing group performance," European Journal of Operational Research, Elsevier, vol. 241(3), pages 796-805.
    23. Apostolos Christopoulos & Ioannis Dokas & Sofia Katsimardou & Eleftherios Spyromitros, 2022. "The Malmquist Productivity measure for UK-listed firms in the aftermath of the global financial crisis," Operational Research, Springer, vol. 22(2), pages 1617-1634, April.
    24. Dan Friesner & Robert Roseman & Matthew McPherson, 2008. "Are hospitals seasonally inefficient? Evidence from Washington State," Applied Economics, Taylor & Francis Journals, vol. 40(6), pages 699-723.

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