Assessing Panamanian hospitals' performance with alternative frontier methods

Abstract

In the last decades, there has been a growing interest in measuring the efficiency of hospitals using different methodological approaches, mainly represented by data envelopment analysis (DEA) and stochastic frontier analysis (SFA). In this study, we estimate efficiency measures of performance for a sample of Panamanian public hospitals over an 11-year period (2005–2015) using both traditional methods (DEA and SFA) and compare them with efficiencies estimated with an alternative approach, the so-called StoNED (stochastic semi-nonparametric envelopment of data), which combines the virtues of those methods in a unified framework. One of the most interesting features of the public health system in Panama is that it is segmented, as hospitals are operating under two parallel management schemes (the Ministry of Health and the Social Security Fund), thus in our empirical analysis we will also focus on exploring the differences between hospitals operating under each regime. Our results show that there are certain divergences in the efficiency scores estimated with different methodologies, but for all of them it is possible to detect that Panamanian hospitals experienced a clear decrease in their efficiency levels throughout the period evaluated, being this much higher in the hospitals belonging to the Social Security Fund.