Exploring the Financial Productivity of Hospitals with Malmquist Index and Data Envelopment Analysis

Productivity is one of the indicators for assessing the status quo regarding use of production factors, including financial resources, and the health management systems, especially hospitals, are no exception. This study endeavored to evaluate the financial productivity of social security hospitals in Iran using the Malmquist Productivity Index (MPI).

This study was a survey research. To calculate the MPI in all social security hospitals during 2015 to 2018, initially, through interviews with 10 experts in this field, the most important criteria for evaluating financial productivity in hospitals were identified (10 criteria). Seeing as the specified criteria had some special features, they required mathematical modeling; in such a way that some of these criteria were uncontrollable and others were among the undesirable criteria. The proposed mathematical model was a network data envelopment analysis (DEA) model with correct input and output, fixed input, and undesirable output for use in calculating the MPI.

The calculation of financial productivity of hospitals was possible using MPI and DEA method with the help of 10 main criteria including personnel cost, administrative cost, cost of transfer payments, number of active beds, cost of physicians’ benefits and perks, cost of staff’s motivational benefits and perks, the amount of invoices for hospitalized patients, the amount of invoices for outpatients, the sum of medical functions, and the number of days of hospitalization. The results confirmed those obtained in the previous studies.

Knowing the financial productivity of hospitals during different periods can lead to the optimal allocation of financial resources to increase the financial productivity of hospitals.