Technical efficiency of traditional hospitals and public enterprises in Andalusia (Spain)

Objective: To assess the technical efficiency of traditional public hospitals without their own legal identity and subject to administrative law, and that of public enterprise hospitals, with their own legal identities and partly governed by private law, all of them belonging to the taxypayer-funded health system of Andalusia during the period 2005 -2008. Methods: The study included the 32 publicly-owned hospitals in Andalusia during the period 2005-2008. The method consisted of two stages. In the first stage, the indices of technical efficiency of the hospitals were calculated using Data Envelopment Analysis, and the change in total factor productivity was estimated using the Malmquist index. The results were compared according to perceived quality, and a sensitivity analysis was conducted through an auxiliary model and bootstrapping. In the second stage, a bivariate analysis was performed between hospital efficiency and organization type. Results: Public enterprises were more efficient than traditional hospitals (on average by over 10%) in each of the study years. Nevertheless, a process of convergence was observed between the two types of organizations because, while the efficiency of traditional hospitals increased slightly (by 0.50%) over the study period, the performance of public enterprises declined by over 2%. Discussion: The possible reasons for the greater efficiency of public enterprises include their greater budgetary and employment flexibility. However, the convergence process observed points to a process of mutual learning that is not necessarily efficient. (C) 2014 SESPAS. Published by Elsevier Espana, S.L.U. All rights reserved.