Skip to main content
SpringerLink
Log in

Resource Allocation in Public Healthcare: A Team-DEA Model

  • Published:
Journal of Systems Science and Complexity Aims and scope Submit manuscript

Abstract

This paper combines the theory of teams and data envelopment analysis (DEA) to design a mechanism to optimally allocate resources in public healthcare. A statutory authority and the public hospitals under its governance are interpreted as a team, the members of which seek to operate efficiently under the shared institutional constraint that public healthcare is a public good. The individual public hospital exploits DEA to maximize own-payoff, subject to the team-condition that the payoff of each other public hospital does not fall and thereby subtract from the external effects created by the public supply of healthcare. The resulting team-DEA solution, which is shown to be both an individually-efficient and team-satisficing equilibrium and to be computable in terms of a convergent algorithm, can then be applied by the authority to determine the optimal allocation of resources in public healthcare. A case based on Chinese data is presented to illustrate the team-DEA model’s ready operationalization and computation.

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. Chernew M E and Newhouse J, Health care spending growth, eds. by Pauly M V, McGuire M V T G, and Barros P P, Handbook of Health Economics, Elsevier, Amsterdam, 2012.

  2. HMSO, United kingdom department of health: The NHS plan, Command Paper Cm 4818-1, 2000.

  3. Jakovljevic MB, Resource allocation strategies in southeastern european health policies, European Journal of Health Economics, 2013, 14(2): 153–159.

    Article  Google Scholar 

  4. Hong Kong Special Administration Region (SAR) Government (2015), Government Revenue and Expenditure 2015, “http: www.censtad.gov.hk hkstat”.

  5. Petrou S and Wolstenholme J, A review of alternative approaches to healthcare resource allocation, Pharmaco Economics, 2000, 18(1): 33–43.

    Article  Google Scholar 

  6. Weinstein M C, Principles of cost-effective resource allocation in health care organizations, International Journal of Technology Assessment in Health Care, 1990, 6(1): 93–103.

    Article  Google Scholar 

  7. Eichler H G, Kong S X, Gerth W C G, et al., Use of cost-effectiveness analysis in health-care resource allocation decision-making: How are cost-effectiveness thresholds expected to emerge? Value in Health, 2004, 7(5): 518–528.

    Article  Google Scholar 

  8. Stinnett A A and Paltiel A D, Mathematical programming for the efficient allocation of health care resources, Journal of Health Economics, 1996, 15(5): 641–653.

    Article  Google Scholar 

  9. Hans E W, van Houdenhoven M, and Hulshof P J H, A Framework for Healthcare Planning and Control, ed. by Hall R, Handbook of Healthcare System Scheduling, 2011.

  10. Whittaker W, Efficiency of resource allocation funding formulae, ed. by Culyer A J, Encyclopedia of Health Economics, Elsevier, Amsterdam, 2014.

  11. Bhattacharya J, Hyde T, and Tu P, Health Economics, Palgrave Macmillan, London, 2014.

    Book  Google Scholar 

  12. Marschak J and Radner R, Economic Theory of Teams, Yale University Press, New Haven, 1972.

    MATH  Google Scholar 

  13. Radner R, Teams, eds. by McGuire C B and Radner R, Decision and Organization, 2nd Edition, University of Minnesota Press, Minneapolis, 1986a.

  14. Lin S A Y, Theory and Measurement of Economic Externalities, Academic Press, New York, 1976.

    Google Scholar 

  15. Hurley J, An Overview of the Normative Economics of the Health Sector, eds. by Culyer A J and Newhouse J P, Handbook of Health Economics, Elsevier, Amsterdam, 2000.

  16. Fleubaey M and Schokkaert E, Equity in health and health care, eds. by Pauly M V, McGuire T G, and Barros P P, Handbook of Health Economics, Elsevier, Amsterdam, 2012.

  17. Weatherly H L A, Cookson R A, and Drummond M F, Economic evaluation of public health interventions: Methodological challenges, ed. by Culyer A J, Encyclopedia of Health Economics, Elsevier, Amsterdam, 2014.

  18. Gyrd-Hansen D, Concepts of efficiency in health care, ed. by Culyer A J, Encyclopedia of Health Economics, Elsevier, Amsterdam, 2014.

  19. Ng N Y and Ruger J P, Ethics and social value judgements in public-health, Ed. by Culyer A J, Encyclopedia of Health Economics, Elsevier, San Diego, 2014, 1: 287–291.

    Google Scholar 

  20. Krantz D H, Luce R D, Suppes P, et al., Foundations of Measurement, Volume I: Additive and Polynomial Representations, Academic Press, New York, 1971.

    MATH  Google Scholar 

  21. Green H A J, Aggregation in Economic Analysis, Princeton University Press, Princeton NJ, 1964.

    Book  Google Scholar 

  22. Charnes A, Cooper W W, Lewin A Y, et al., Data Envelopment Analysis: Theory, Methodology, and Application, Kluwer Academic Publishers, Boston, 1997.

    Google Scholar 

  23. Lozano S and Villa G, Centralized resource allocation using data envelopment analysis, Journal of Productivity Analysis, 2004, 22(1): 143–161.

    Article  Google Scholar 

  24. Lozano S, Villa G, and Adenso-Diaz B, Centralized target setting for regional recycling operations using DEA, Omega, 2004, 32(2): 101–110.

    Article  Google Scholar 

  25. Korhonen P and Syrjänen M, Resource allocation based on efficiency analysis, Management Science, 2004, 50(8): 1134–1144.

    Article  MATH  Google Scholar 

  26. Cooper W W, Seiford L M, and Tone K, Data Envelopment Analysis, 2nd Edition, Springer Science, New York, 2007.

    MATH  Google Scholar 

  27. Fang L and Zhang C Q, Resource allocation based on the DEA model, Journal of the Operational Research Society, 2008, 59(8): 1136–1141.

    Article  Google Scholar 

  28. Asmild M, Paradi J C, and Pastor J T, Centralized resource allocation using BCC model, Omega, 2005, 37(1): 40–49.

    Article  Google Scholar 

  29. Cooper W W, Seiford L M, and Zhu J, Handbook on Data Envelopment Analysis, 2nd Edition, Springer Science, New York, 2011.

    Book  MATH  Google Scholar 

  30. Chilingerian J A and Sherman H D, Health care applications: From hospitals to physicians, from productive efficiency to quality frontiers, eds. by Cooper W W, Seiford L M, and Zhu J, Handbook on Data Envelopment Analysis, 2nd Edition, Springer Science, New York, 2011.

  31. Zhu J, Data Envelopment Analysis: A Handbook of Empirical Studies and Applications, Springer Science, New York, 2016.

    Book  MATH  Google Scholar 

  32. Simon H A, Rational decision making in business organizations, Nobel Lecture 1978, American Economic Review, 1979, 69(4): 493–513.

    Google Scholar 

  33. Charnes A, Cooper W W, and Rhodes E, Measuring the efficiency of decision making units, European Journal of Operation Research, 1978, 2(6): 429–444.

    Article  MathSciNet  MATH  Google Scholar 

  34. Cheung M T and Liao Z, Time asymmetry in business processes, Communications of the ACM, 2002, 45(5): 107–109.

    Article  Google Scholar 

  35. Liang L, Wu J, Cook W D, et al., The DEA game cross-efficiency model and its nash equilibrium, Operations Research, 2008, 56(5): 1278–1288.

    Article  MathSciNet  MATH  Google Scholar 

  36. Grosskopf S and Valdmanis V, Measuring hospital performance: A non-parametric approach, Journal of Health Economics, 1987, 6(2): 89–107.

    Article  Google Scholar 

  37. Radner R, Allocation of a scare resource under uncertainty: An example of a team, eds. by McGuire C B and Radner R, Decision and Organization, 2nd Edition, University of Minnesota Press, Minneapolis, 1986b.

Download references

Acknowledgments

The authors are much indebted to Prof. Yeoh E K (Jockey Club School of Public Health and Primary Care, Chinese University of Hong Kong), Prof. Yam L Y C (Hong Kong Hospital authority and Jockey Club School of Public Health and Primary Care, Chinese University of Hong Kong), and Prof. Huang G Q (Department of Industrial and Manufacturing Systems Engineering, University of Hong Kong) for helpful comments.

Author information

Authors and Affiliations

  1. Department of Management Sciences, City University of Hong Kong, Kowloon, Hong Kong, China

    Kin Keung Lai

  2. Jockey Club School of Public Health and Primary Care, Faculty of Medicine, The Chinese University of Hong Kong, Shatin, Hong Kong, China

    Kin Keung Lai

  3. Department of Industrial and Manufacturing Systems Engineering, The University of Hong Kong, Hong Kong, China

    Michael Tow Cheung & Yelin Fu

Authors
  1. Kin Keung Lai
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Michael Tow Cheung
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Yelin Fu
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Kin Keung Lai.

Additional information

This paper was supported by a TRS Research Grant of the RGC, Hong Kong Government under Grant No. 8770001.

This paper was recommended for publication by Editor WANG Shouyang.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Lai, K.K., Cheung, M.T. & Fu, Y. Resource Allocation in Public Healthcare: A Team-DEA Model. J Syst Sci Complex 31, 463–472 (2018). https://doi.org/10.1007/s11424-017-6124-6

Download citation

  • Received:

  • Revised:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11424-017-6124-6

Keywords

Search

Navigation