Aiming to enhance quality of care and increase efficiency, public hospitals
have undergone several reforms in the course of last two decades in Iran. This paper
reports the result of a national research that aimed to measure the technic al efficiency
and productivity change of public hospitals during 2012-2016 in Iran.
We used Extended Data Envelopment Analysis (Extended-DEA) (an innovative
modification to conventional DEA) to measure technical efficiency and productivity of 568
public hospitals. Nationally representative data were extracted from the official annual health
reports. Data were analysed using GAMS software 24.3.
The average efficiency score of all hospitals was 0.733. 10.1% of all hospitals were
efficient while 2.68% of them were under 0.2. The Malmquist Productivity Index (MPI)
progressed in 49.3% of hospitals, remained constant in 2.3%, while 48.2% of hospitals regressed
during 2015-2016. The average of MPI was 1.07 over the period of analysis.
Extra efforts seem to be essential to enhance the efficient use of resources and
develop appropriate policy solutions and tools. In particular, to increase the return to scale, we
advocate the merger of small-size district hospitals towards establishing bigger efficient
hospitals in various geographical regions across the country.