Evaluating the Technical Efficiency of Hospitals in Southeastern Nigeria

Abstract

Efficient utilization of health resources is a critical requirement for attaining health system goals particularly in low income countries. Inefficiency in health resource utilization may imply death for the next child in the queue in a resource constrained environment. This study analyzes the technical and scale efficiencies in hospitals in low income countries using Nigeria as a case study. The study uses primary data sample of 200 hospitals to estimate technical and scale efficiencies using the Data Envelopment Analysis (DEA). The results clearly indicate large variation in the efficiency of hospitals with average efficiency score of about 59% under the constant returns to scale assumption and about 72% under variable returns to scale. This raises some concerns about the level of technical and scale efficiencies in utilization of scarce health resources in the hospital sector particularly in low income countries.