Assessing Hospital Performance in Indonesia: An Application of Frontier Analysis Techniques

Firdaus Hafidz (), Tim Ensor and Sandy Tubeuf
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Firdaus Hafidz: Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds
Tim Ensor: Leeds Institute of Health Sciences, University of Leeds

No 1801, Working Papers from Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds

Abstract: Despite increased national health expenditure in health facilities in Indonesia, health outcomes remain poor. The aim of our study is to examine the factors determining the relative efficiency of hospitals. Using linked national data sources from facility, households, and village-based surveys, we measure the efficiency of 200 hospitals across fifteen provinces in Indonesia with output oriented data envelopment analysis (DEA) and stochastic frontier analysis (SFA). Inputs include the number of doctors, nurses and midwives, other staff, and beds while outputs are the number of outpatient visits and bed-days. We run truncated regression in second stage DEA and one stage SFA analysis to assess contextual characteristics influencing health facilities performance. Our results indicate a wide variation in efficiency between health facilities. High-performing hospitals are in deprived areas. Hospitals located in less concentrated health facilities, in Java and Bali Island, high coverage of insurance scheme for the poor perform better than in other geographical location. We find an inconclusive impact of quality of care, and ownership on efficiency. This paper concludes by highlighting the characteristics of hospitals that have the potential to increase efficiency.

Keywords: Efficiency; hospitals; frontier analysis; data envelopment analysis; stochastic frontier analysis; Indonesia (search for similar items in EconPapers)
JEL-codes: C50 I10 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2018
New Economics Papers: this item is included in nep-cse, nep-dev, nep-eff, nep-hea and nep-sea
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