Efficiency and Productivity Pattern of Public and Private Hospitals in Oyo State Nigeria

International Journal of Research and Innovation in Social Science (IJRISS) | Volume III, Issue IV, April 2019 | ISSN 2454–6186

Efficiency and Productivity Pattern of Public and Private Hospitals in Oyo State Nigeria

Joseph Afolabi Ibikunle
Department of Economics, Ajayi Crowther University, Oyo, Nigeria

Abstract:-The importance of good health to social and economic development has been the reason for countries’ health systems to pursue effective, efficient, quality and equity objectives. However, the success depends on how much any or all of these objectives could be attained. This study estimates the efficiency and productivity pattern of public and private hospitals in Oyo State, Nigeria for the period of 2007 to 2016. Convenience sampling method was employed to select 10 public and 10 private hospitals. The input data are the number of Doctors, Nurses, hospital beds, unit cost of operation, equipment and cost of drugs while the output variables were inpatient, outpatient, deliveries and revenue. Data Envelopment Analysis and the Malmquist Productivity Index (MPI) was used to calculate the efficiency and productivity growth of the hospitals. Findings revealed that the public hospitals were more efficient in terms of technical, allocative and cost with the mean score of (0.858, 0.822 and 0.701) than the private hospital (0.616, 690 and 0.425), but both are deteriorating in productivity growth (0.971 and 0.763). The study recommended that the Ministries of Health should equip the hospitals towards the changing health demands and competitiveness in the cost of operation for both hospitals.

Keywords: Hospital, Data Envelopment Analysis, Malmquist Productivity Index, Productivity Growth, Health System, Efficiency

JEL Classification: I111, D24

I. INTRODUCTION

The choice of health care facilities by individuals is determined in part by their taste, satisfaction with services, and the perceived quality of care provided [1]. This is because, health is seen as the wealth of a nation and it significantly enhances the economic development of the nation [2, 3, 4]. Towards providing good health, the government makes it top priority in its Millennium Development Goals (MDGs). However, with the near failure of the MDG to meet its targets and the new policy of sustainable development at the end of 2015, there is a growing sense of urgency among international agencies to intensify efforts on addressing the global challenge of effective and efficient health care delivery system. Consequently, the importance of human health in national development has made efficiency in the production of health services a subject of intense research interests in the literature. This, of course, seems worthwhile if Hollingsworth’s and Umezinwa’s opinions that ‘spending on health is normally regarded as a productive investment’ is considered [5, 6].

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