Technical efficiency in public hospitals in Kenya
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Date
2015-11
Authors
Rithaa, Koome Gilbert
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
The World Health Organization called attention to the importance of efficiency in all
functions of a health system for the ultimate achievement of the goals of health
improvement, stewardship, responsiveness and fairness in financing. Although, efficiency
improvement should be seen as a strategy for mobilizing domestic resources and utilizing
the available resources without waste to achieve the desired health sector goals, it is not
usually the case especially in low income countries like Kenya despite health facilities
receiving over 75% of the total recurrent budget from Government allocation. Over the
past years, there has been little health outcome improvement despite significant increase
in budgetary allocation to the health sector especially the health facilities. Therefore,
quantifying the current level of efficiency in the hospitals is an accepted strategy in
dealing with inefficiencies and enhancing the scarce resource optimization. The general
objective of this study was to assess the technical efficiency in public hospitals in Kenya.
The study used an analytical and descriptive study design employing econometric
techniques for data analysis. Simple random sampling was used to select a study sample
of 30 level 4 hospitals in Kenya. A cross sectional model was used to analyze secondary
data collected from District Health Information System using Data Envelopment Analysis
to determine efficiency levels while interval regression was used to establish
determinants of inefficiency. Results indicated that 50% of the hospitals were Constant
Returns to Scale technically efficient with a mean efficiency score of 80.6% while 66.6%
of the hospitals were Variable Returns to Scale technically efficient with a mean
efficiency score of 92.7%. In terms of Scale Efficiency, 50% of the hospitals were scale
efficient with a mean efficiency score of 86.8% score. There was a constant return to
scale in 50% of the hospitals, increasing returns to scale in 40% of the hospitals and
decreasing returns to scale in 10% of the hospitals. The mean level of technical
inefficiency was 21.9%. The total inputs slacks in the inefficient hospitals were 122 beds
and 454 staff which represented an input slack of 7.3% for the beds and 22.1 % for the
staff. All the inefficient hospitals required a 27.6% increase in total outpatient visits
which translated to an additional 217, 547 outpatient visits. A total of 5,006 discharges
were required which was a 9.2% increase in total discharges. Further, all the inefficient
hospitals required to augment their operations capacity with a sum of 1,596 operations
which represented a 31.3% increase in total operations for them to be technically
efficient. Interval regression analysis results showed that outpatient to inpatients visits
ratio, bed occupancy ratio, inpatient discharges to death ratio, National Health Insurance
Fund bed days to bed days of those not enrolled in National Health Insurance Fund, gross
death rate influence technical inefficiency levels. In conclusion, a substantial proportion
of public hospitals were technically inefficient due to inappropriate production sizes
occasioned by use of excess production inputs to produce sub-optimal outputs. Therefore,
there is need for effective policy and managerial interventions for dealing with the
existing production slacks and factors influencing inefficiency in the hospitals.
Description
A thesis submitted in partial fulfillment of the requirements for the award of the degree of master of health management in the school of public health of Kenyatta University. November,2015