Strategic alliances' effects over hospital efficiency and capacity utilization in Mexico

Purpose This paper aims to investigate the efficiency implications of belonging to a strategic hospital alliance (SHA) and measuring the effects over capacity utilization of such agreements in a Mexican healthcare context. Design/methodology/approach Data Envelopment Analysis (DEA) is the nonparametric methodology used, which supports both objectives. Technological gaps ratios are calculated by using DEA-metafrontier approach to compare efficiency between SHA members and a hospital's control group. Also, hospital capacity utilization ratios are used as the maximum rate of output possible from fixed inputs in a frontier setting using directional distance functions. Data were collected from an alliance called Consorcio Mexicano de Hospitales in Mexico, which has 29 general private hospitals and a group of 47 hospitals with same characteristics from a database made by the Instituto Nacional de Estadistica y Geografia for year 2014. Findings The results indicate that efficiency is better at hospitals that belong to an alliance; it also shows an improvement of installed capacity management for hospital alliances in Mexico. Originality/value The results can be useful for both private health organization managers and regulators themselves to adopt management practices that may end up having a favorable impact on cost and prices containment. Additionally, there are no previous studies neither in Mexico nor in Latin America that analyze the impact of strategic hospitality alliances on the efficiency and utilization of the capacity of private hospitals.