Skip to main content
SpringerLink
Log in

Trends in Department of Defense hospital efficiency

  • Articles
  • Published:
Journal of Medical Systems Aims and scope Submit manuscript

Abstract

This study employs a simple cross sectional design using longitudinal data to explore the underlying factors associated with differences in hospital technical efficiency using data envelopment analysis (DEA) in the Department of Defense (DOD) sector across three service components, the Army, Air Force and Navy. The results suggest that the services do not differ significantly in hospital efficiency. Nor does hospital efficiency appear to differ over time. With respect to the efficient use of input resources, the services experienced a general decline in excessive usage of various inputs over the three years. Analysis of the returns to scale captures opportunities for planners of changing the relative mix of output to input slacks for increasing a hospital's efficiency. That is, policy makers would get more immediate “bang per buck” with emphasis on improving the efficiencies of hospitals with higher returns to scale than other hospitals. Findings also suggest a significant degree of comparability between the DEA measure and these measures often used to indicate efficiency.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  1. Scott, W.R., and Shortell, S.M., Organizational performance: Managing for efficiency and effectiveness. In Shortell, S.M., Kaluzny, A.D. (Eds.),Health Care Management—A Text in Organizational Theory and Behavior, Wiley, New York, 1983, pp. 418–455.

    Google Scholar 

  2. Lanier, J.O., and Boone, C., Restructuring military health care: The winds of change blow stronger.Hosp. Health Serv. Admin. 38:121–132, 1993.

    Google Scholar 

  3. Burke, M., Downsizing of armed forces may affect civilian health providers.AHA News 6:July 1, 1991.

  4. Staff. Basc closures impact on health care.Air Force Times 20:April 13, 1992.

  5. Hitzelberger, A.L., Has the time come to establish the Defense Health Agency?Milit. Med. 156:318–319, 1991.

    Google Scholar 

  6. Burke, M., Armed services are marching toward managed care alternatives.AHA News 6:January 20, 1992.

  7. Gunby, P., Another war ... and more lessons for medicine to ponder in aftermath.J. Am. Med. Assoc. 266(5):619–620, 1991.

    Google Scholar 

  8. Chaconas, J., Military marshals resources for maneuvers in coordinated care.AHA News 4:December 14, 1992.

  9. Chaconas, J., Access efforts accelerate despite the demise of DVA project.AHA News 8:March 9, 1992.

  10. Stern, L., Militant medicine—the Defense Department has health care costs in its bombsights. There may be strategic lessons here for employers.Bus. Health 70–80, October 1991.

  11. Clauser, S.B., and Cooper, B.S., The CHAMPUS reform initiative: Tailoring private sector innovations to public-sector needs.Advan. Health Econ. Health Serv. Res. 9:247–265, 1988.

    Google Scholar 

  12. Kenkel, P., Defense Dept.'s cost-cutting could forge new civilian links.Mod. Healthcare 6:May 6, 1991.

  13. Lindberg, K.G., and Sylvester, J.C., The costing out of operational expenses between the Veterans Administration and the Air Force at the New Mexico Regional Federal Medical Center.Milit. Med. 157:569–573, 1992.

    Google Scholar 

  14. Staff. Enhanced DVA/DOD health care sharing agreements proposed.AHA News 2:May 4, 1992.

  15. Pratt, D.H., Utilization review in the military health care delivery system.Milit. Med. 157(9):476–479, 1992.

    Google Scholar 

  16. Kravitz, R., Thomas, N., Sloss, E., and Hosek, S., Satisfaction and dissatisfaction in institutional practice: Results from a survey of U.S. military physicians.Milit. Med. 158:41–50, 1993.

    Google Scholar 

  17. Bales, J.D., Preparing for the downsizing and closure of Letterman Army Medical Center: A case study.Milit. Med. 158:84–90, 1993.

    Google Scholar 

  18. Buck, A.S., Martin, E.D., Mazzuchi, J.F., Merry, M., and Mendez, E., The Department of Defense civilian external peer review program: An interim report.Milti. Med. 157:40–46, 1992.

    Google Scholar 

  19. Bannick, R.R., and Ozcan, Y.A., Efficiency analysis of federally funded hospitals: comparison of DOD and VA hospitals using data envelopment analysis.Health Serv. Manag. Res., 1993.

  20. Stefos, T., La Vallee, N., and Holden, F., Fairness in prospective payment: A clustering approach.Health Serv. Res. 27:239–261, 1992.

    Google Scholar 

  21. Gooding, R.Z., and Wagner, J.A., A meta-analytic review of the relationship between size and performance: The productivity and efficiency of organizations and their subunits.Admin. Sci. Quart. 30:462–481, 1985.

    Google Scholar 

  22. Ruchlin, H.S., Problems in measuring institutional productivity.Topics in Health Care Financing/Improving Productivity Aspen Publishers, Maryland, 1989.

    Google Scholar 

  23. Grosskopf, S., Valdmanis, V., Measuring hospital performance.J. Health Econ. 6:89–107, 1987.

    Google Scholar 

  24. Sexton, T.R., The Methodology of Data Envelopment Analysis. In Silkman, R.H. (ed.),Measuring Efficiency: An Analysis of Data Envelopment Analysis Jossey-Bass, San Francisco, pp. 7–29, 1986.

    Google Scholar 

  25. Norman, M., Stoker, B.,Data Envelopment Analysis: The Assessment of Performance Wiley, New York, 1991.

    Google Scholar 

  26. Neter, J., Wasserman, W., and Kutner, M.H.,Applied Linear Statistical Models (Second Edition), Irwin, Homewood, IL, 1985.

    Google Scholar 

  27. Sherman, H.D., Managing productivity of health care organizations. In Silkman, R.H. (ed.),Measuring Efficiency: An Analysis of Data Envelopment Analysis Jossey-Bass, San Francisco, 1986.

    Google Scholar 

  28. Charnes, A., Cooper, W.W., and Rhodes, E., Measuring the efficiency of decision making units.Eur. J. Operat. Res. 2:429–444, 1978.

    Google Scholar 

  29. Charnes, A., and Cooper, W.W., Management science relations for evaluation and management accountability.J. Enterprise Manag. 2(2):143–162, 1980.

    Google Scholar 

  30. Charnes, A., Cooper, W.W., Lewin, A.Y., Morey, R.C., and Rousseau, J., Sensitivity and stability analysis in DEA.Ann. Operat. Res. Thompson, R., and Thrall, R.M. (eds.), 2:139–156, 1988.

    Google Scholar 

  31. Morey, R.C., Fine, D.J., Loree, S.W., Retzlaff-Roberts, D.L., and Tsubakitani, S.,Med. Care 30:677–695, 1992.

    Google Scholar 

  32. Rosko, M.D., Measuring technical efficiency in health care organizations.J. Med. Syst. 14(5):307–322, 1990.

    Google Scholar 

  33. Nunnamaker, T., Measuring routine nursing service efficiency: A comparison of cost per patient day and data envelopment analysis models.Health Serv. Res. 18(2):183–205, 1983.

    Google Scholar 

  34. Shinnar, A., Kamis-Gould, E., Delucia, N., and Rothbard, A., Organizational determinants of efficiency and effectiveness in mental health partial care programs.Health Serv. Res. 25(2):387–420, 1990.

    Google Scholar 

  35. Nyman, J.A., Bricker, D.L., and Link, D., Technical efficiency in nursing homec.Med. Care 28(6):541–551, 1990.

    Google Scholar 

  36. Sexton, T.R., Leiken, A.M., Nolan, A.H., Liss, S., Hogan, A., and Silkman, R.H., Evaluating managerial efficiency of Veteran's Administration medical centers using data envelopment analysis.Med. Care 27(12):1175–1188, 1989.

    Google Scholar 

  37. Huang, Y-G.L., An application of data envelopment analysis: measuring the relative performance of Florida general hospitals.J. Med. Syst. 14(4):191–196, 1990.

    Google Scholar 

  38. Ozcan, Y.A., Luke, R.D., and Haksever, C., Ownership and Efficiency Across Hospital Types.Med. Care 30(9):781–794, 1992.

    Google Scholar 

  39. Scott, W.R., and Flood, A.B., Costs and the quality of care in hospitals: A review of the literature. In Flood, A.B., and Scott, W.R. (eds.),Hospital Structure and Performance Johns Hopkins University Press, Baltimore, MD, pp. 59–102, 1987.

    Google Scholar 

  40. Ozean, Y.A., Sensitivity analysis of hospital efficiency under alternative output/input combinations and peer groupings.Knowl. Pol. 5(4):1–31, 1993.

    Google Scholar 

  41. Epstein, M.K., Henderson, J.C., Data envelopment analysis for managerial control and diagnosis.Dec. Sci. 20:90–119, 1989.

    Google Scholar 

  42. Ozean, Y.A., and Luke, R.D., National Study of Efficiency in Urban Markets.Health Serv. Res. 26(2):719–739, 1993.

    Google Scholar 

  43. Ozean, Y.A., and Lynch, J.R., Rural Hospital Closure: An Inquiry to Efficiency. In Scheffler, R., and Rossiter, L.F. (eds.),Advan. Health Econ. Health Serv. Res. 19:205–224, 1993.

    Google Scholar 

  44. Goldsmith, J.C., Competition's impact: A report from the front.Health Affairs 7(3):162–173, 1988.

    Google Scholar 

  45. Nutt, P.C., and Milter, R.G., Contract management and institutional cost control.Hosp. Health Serv. Manag. 37:115–130, 1992.

    Google Scholar 

  46. Shortell, S.M., Morrison, E.M., and Friedman, B.,Strategic Choices for America's Hospitals: Managing Change in Turbulent Times. Josey-Bass, San Francisco, 1990.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. From the Department of Health Administration, Medical College of Virginia Campus, Virginia Commonwealth University, P.O. Box 980203, 23298-0203, Richmond, Virginia

    Yasar A. Ozcan & Richard R. Bannick

Authors
  1. Yasar A. Ozcan
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Richard R. Bannick
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

About this article

Cite this article

Ozcan, Y.A., Bannick, R.R. Trends in Department of Defense hospital efficiency. J Med Syst 18, 69–83 (1994). https://doi.org/10.1007/BF00999453

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF00999453

Keywords

Search

Navigation