Efficiency Measurement for Hospitals Owned by the Iranian Social Security Organisation

Hossein Hajialiafzali, J. R. Moss, M. A. Mahmood

This study used Data Envelopment Analysis (DEA) to examine the relative efficiency of hospitals owned by the Iranian Social Security Organization, which is the second largest institutional source of hospital care in that country. Using data for the year 2002, 26 of the 53 hospitals were deemed to be efficient. Inefficient hospitals had an average score of 90%, implying a potential reduction in all inputs on average by about 10% with no impact on output levels. In addition to the conventional DEA measurement, efficient hospitals were ranked by calculating super-efficiency scores, by identifying weak efficient hospitals, and by determining the frequency of peers. The study provides useful information for improving hospital management, rationalizing resource allocation, and improving services provided by hospitals.