Business Economics

In national health services, where there is a tendency towards a lack of resources and a continuous increase in demand, it is necessary to implement decisions that promote efficiency. In this paper we focus on potential diversification economies as a strategy to increase efficiency levels. We evaluate the change in efficiency in Catalan hospitals between 1987 and 1992, and analyse the presence of possible diversification economies in each hospital. We use Data Envelopment Analysis, which does not need information on either input or output prices. The results are that the majority of hospitals could increase their efficiency and reduce their costs by diversification to the output-mix offered. Potential productivity gains are between 29% and 46%.

The utilisation rate of installed capacity is a popular concept in both the performance appraisal literature and in publications on industrial organisation. However, a common consensus has yet to be reached concerning the most appropriate way to measure the capacity utilisation of physical inputs and its final effect on company results. On the one hand, there are approaches that establish capacity utilisation with reference to the maximum level of production that can be achieved. In contrast, there are other approaches more strictly related to economic analysis of operating costs. In this paper, our main objective is to define an analytical process that uses non-parametric frontier methodology to provide the distance between the total costs of a given unit and the short-run frontier costs. As a natural extension of this proposal, it is possible to compute the short-run inefficiency caused by a non-optimal dimension of the fixed inputs: we define this as capacity efficiency.The proposed evaluation process is applied to Spanish savings banks covering the period between 1986 and 1995. Throughout the period analysed, the greater part of cost inefficiency is due to capacity efficiency.

This paper focuses on hospital performance using Data Envelopment Analysis (DEA) and Malmquist index numbers. We present a new approach that restricts achievement in productivity if quality is reduced. Results present an apparent negative evolution in productivity. The decomposition on the Malmquist index shows a clear improvement in technical quality, a convergence in efficiency between frontier and non-frontier hospitals and a theoretical fall in technical change (drop of the best practice frontier between years). The conclusions present reasoning justifying these results and propose the use of this methodology for the appraisal of effectiveness in the public sector.