The Greek hospital sector and its cost efficiency problems in relation to unexpected hospital demand: A policy-making perspective

Abstract

Public hospitals in Greece are part of a National Health System, established in 1983. This paper presents the hospital sector changes in Greece over the last 20 years, emphasizing cost efficiency. We break down its historical developments into two periods: 1983-1999 and 2000-2008. From the historical review, it is concluded that the system is cost inefficient, based on two components. First, a number of resources are idle, and second, part of the hospital capacity is never used or is misused. However, idle resources and unused stand-by capacity is not a sufficient condition to determine whether a public hospital is running below optimal cost efficiency level. Such a practice could be an optimal (cost efficient) response by hospital managers to meet unexpected demand. This is an issue that needs further research in order to investigate whether part of this inefficiency could be explained by the reserve capacity held by hospitals due to unexpected demand.