Technical efficiency evaluation of military hospitals in Iran using data envelopment analysis

Healthcare costs in our economies have grown dramatically in the past few decades where inefficiency in healthcare operations has contributed to these rising costs. The aim of this study was to evaluate the technical efficiency of military hospitals in Iran by applying a nonparametric method, Data Envelopment Analysis (DEA). DEA's main advantages for health care application are its flexibility and versatility; it requires no information on relative prices, and can easily accommodate multiple inputs and outputs. The data for this study were obtained for the years 2016 and 2017 from military hospital documents in Iran. We have selected four output variables and six input variables. In this study, the technical efficiency and inefficiency of the military hospitals was determined, for hospitals with technical inefficiencies, referral hospitals were identified as patterns that could be referred to them, for inefficient units, the amount needed to reduce data and increase the number of outputs in each hospital was determined to provide fair guidance for improving their technical efficiency. The results of this study provide a roadmap for both the policy makers and decision makers of the military, in order to be able to optimally utilize the available resources in conditions of resource shortage with reliance on knowledge and utilizing the latest scientific techniques, and consequently improve the performance of hospitals to the frontier of efficiency.