The use of resource allocation approach for hospitals based on the initial efficiency by using data envelopment analysis

Abstract

Introduction: Recourse allocation is very important in today’s highly competitive environment to enhance the quality and reduce costs due to limited resources and unlimited needs of the society. The aim of this study was to implement resource allocation in order to improve the efficiency of hospital. Method: This is a mixed method study. The data used in this paper are secondary data related to the 30 large acute and general hospitals in the US. Bed, service mix, full-time equivalent (FTE), and operational expenses are input indicators in hospital, and adjusted admissions and outpatient visits are output indicators. Using goal programming (GP) model and data envelopment analysis (DEA) model with a common weights, we suggest three scenarios for resource allocation and budget allocation. “Resource allocation based on efficiency”, “budget allocation based on efficiency” and “two stage allocation of budget”. The first scenario was used for allocating the resources and the second and third ones for allocating budget to decision making units (DMUs). The data were analyzed by LINGO software. Results: Before the allocation, four hospitals were efficient and the efficiency of six hospitals was less than 50%, but after allocation, in the first case of the first scenario 14 hospitals, 11 hospitals in the second case of the first scenario, 24 hospitals in the second scenario and 17 hospitals in the third scenario were efficient, and it is an important point that after the allocation, efficiency of all hospitals increased. Conclusion: This study can be useful for hospital administrators; it can help them to allocate their resource and budget and increase the efficiency of their hospitals.

Keywords

• Efficiency
• Hospitals
• Resource allocation
• Budgets