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Niall Devitt

Supervisors:

Dr Marta Zieba Declan Dineen

Working Title of Thesis:

Evaluation of production technology and efficiency of acute public hospitals in Ireland. An empirical SFA panel data analysis for the years 2017-2018

Abstract

This research aims to evaluate both the production technology and efficiency of Irish acute public hospitals from July 2017 to June 2018 using a unique monthly panel data set collated specifically for this purpose. Recent OECD research indicates inefficiency in the Irish hospital system as compared to its international peers.  Record numbers of patients have been recorded on trolleys over the past number of years and, along with demographic changes anticipated over the foreseeable future, it has become imperative to understand efficiency and resource utilization in the public hospital system.  The research applies a trans-logarithmic specification of the production technology which reveals the production characteristics of the hospital system, while the use of an output distance function in contrast to the single output production function permits the direct parametrization of multiple outputs, a critical construct for the modelling of hospitals. To measure the individual hospitals’ inefficiency, a parametric Stochastic Frontier Analysis (SFA) is applied. The use of panel data SFA models allows us to account for the impact of the unobserved heterogeneity of hospitals on efficiency, whereas the generalised true random effects SFA decomposes inefficiency into the transient and persistent terms. These new, more rigorous, parametric efficiency measurement techniques are complementary to existing research and provide the opportunity to benchmark findings against previous studies. Moreover, this study will produce the most comprehensive analysis of technical and scale efficiency in the Irish hospital sector. The results will allow management in healthcare to identify opportunities for greater resource allocation and utilization