Analysis of efficiency of public hospitals in Kenya: 2008-2011
Efficiency of health facilities in Kenya is crucial especially in the face of the increased Ibudzetary allocations and recent health care reforms. Provision of health services remains sub optimal and efficiency use remains a challenge to policy makers and health managers. It is therefore imperative to estimate efficiency levels, factor productivity growth and determinants of (in) efficiency to alert the policy makers and health managers of any potential gains towards , provision of quality healthcare. Level 5 (provincial and regional) public general hospitals and Level 4 (district and sub-district) public hospitals were studied. Malmquist data development analysis was used to estimate: technical efficiency scores and total factor productivity, stochastic frontier analysis estimated cost efficiency scores while to bit regression analysis was used to identify the determinantsﾒ of (in) efficiency. Data for 2008 to 2011 was used in the analysis. Data envelopment analysis revealed an average technical efficiency score of 95.7~j% for level ~5 hospitals and 97.72% for level 4 hospitals. Stochastic frontier analysis revealed an average cost efficiency score of 77.49% for level 5 hospitals and 66.78% for level 4 hospitals. A ue~~alive technological change for level 4 and 5 public hospitals was found to impact negatively on the total factor productivity for the two levels of public hospitals. An increase in recurrent expenditure was found to reduce cost efficiency in both level 4 and level 5 public hospitals. Increases in number of nurses was found to increase cost efficiency in level 4 public general hospitals while increases of doctors increased cost efficiency in level 4 public hospitals. Conclusively, the study shows that there is potentiality for productivity growth in health sector in Kenya by considering efficiency use and increased investments in technological innovations. Further research study is recommended to seek why increases in recurrent expenditure results into a decline in cost efficiency in level 4 and 5 public hospitals.
University of Nairobi, Kenya