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Operations Research Models Applied for Allocation of Public Resources Under the Efficiency-Effectiveness-Equity (3E) Perspective

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Operations Research Models Applied for Allocation of Public Resources Under the Efficiency-Effectiveness-Equity (3E) Perspective Operations Research Models Applied for Allocation of Public Resources under the Efficiency-Effectiveness-Equity (3E) Perspective THESIS Presented in Partial Fulfillment of the Requirements for the Degree Master of Science in the Graduate School of The Ohio State University By Melissa Pizarro Aguilar Graduate Program in Industrial and Systems Engineering The Ohio State University 2012 Master's Examination Committee: Ramteen Sioshansi, Advisor Jerald Brevick Copyright by Melissa Pizarro Aguilar 2012 Abstract The main difference among operation research models for the private sector and the public sector is the inclusion of the equity criteria. In this sense, one of the objectives of this project was identifying proposed models to solve allocation problems in the public sector, under the efficiency, effectiveness and equity (3E) principles as the providers of public services need to guarantee non-discriminatory access to the services to all of the population, and at the same time make the best use of the limited resources. We identified various models that include the equity perspective, but we focused on the data envelopment analysis (DEA) resources allocation model developed by Goaz Golany and Eran Tamir, as it integrates the 3E. This integration is important as the tradeoffs among certain decisions at each dimension could affect the performance in other dimension. The second objective of this thesis is validating a systematic budget allocation methodology for the primary health care sector in Costa Rica. The institution evaluated is the area of health Jiménez Núñez (Goicoechea 2) which is composed of 10 Basic Teams for Comprehensive Care in Health (EBAIS). The EBAIS were selected as the decision making units for the validation. We applied the model under study progressively, as the first evaluation done was the DEA to obtain the efficiency scores per EBAIS: four EBAIS out of ten were found efficient. Then, to demonstrate how the DEA allocation model improves the efficiency of the DMUs under study, we applied the model for the ii multi-input and multi-output scenario. As a result of the proposed allocation, now eight EBAIS were found efficient. Finally, we include the equity perspective into the analysis. The DEA proved to be a useful management tool as it performs the efficiency assessment from a comparison between DMUs through data and among data by generating the efficiency frontier. To run this operations research model, various analytical choices must be made. When these choices depend heavily on the analysts, the appropriateness of the model depends on the consistency between the analytical choices and the judgment of experienced decision makers. There may exist generally accepted standards in the efficiency and equity literature, but the mathematical model developed will always have to address different factors depending on the object of study. The DEA model has been widely used in health institutions and many other public sector organizations in the world, but this is the first application at the primary health system at Costa Rica and additionally it is including the equity perspective, as most of the literature shows DEA case studies for efficiency assessment only. We can also think of standardizing and systematizing the decision making at the health areas by disseminating the use of the DEA-RAM with equity model and then applying the extensions along the model to be broadened to incorporate resource allocation at the national level as it would be valuable to develop this analysis for the 103 health areas at Costa Rica as DMUs. iii Dedication This thesis is dedicated to my parents, my inspiration. iv Acknowledgments I would like to express my deepest gratitude to my advisor, Dr. Ramteen Sioshansi for his interest, guidance and support through the development of this project. I thank also the director of the area of health Jiménez Nuñez, Dr. Pedro González and the chief of the EBAIS at this area of health, Esteban Avendaño for their interest in this thesis. Special thanks to Dr. Brevick, member the supervisory committee. v Vita 2001................................................................Methodist High School, Costa Rica 2007................................................................B.S. Industrial Engineering, University of Costa Rica 2008 to 2011 ..................................................Faculty, Department of Industrial Engineering, University of Costa Rica 2011................................................................Fulbright Faculty Development Program Grant Award Fields of Study Major Field: Industrial and Systems Engineering vi Table of Contents Abstract ............................................................................................................................... ii Dedication .......................................................................................................................... iv Acknowledgments............................................................................................................... v Vita ..................................................................................................................................... vi List of Tables ..................................................................................................................... ix List of Figures ................................................................................................................... xii Chapter 1: Introduction ...................................................................................................... 1 Chapter 2: Literature Review .............................................................................................. 4 The 3E Perspective in the Public Sector ......................................................................... 5 Operation Research Models for the Allocation of Public Resources .............................. 6 The Data Envelopment Analysis (DEA) ....................................................................... 13 Equity Assessment in Health Care ................................................................................ 20 Chapter 3: The Allocation Model ..................................................................................... 24 Chapter 4: Case Study ....................................................................................................... 30 The National Health System of Costa Rica ................................................................... 30 Health Area Jiménez Núñez (Goicochea 2) .................................................................. 33 vii DEA-RAM Equity Model for the Multi Output Scenario ............................................ 36 Chapter 5: Conclusions and Future Work ......................................................................... 50 References ......................................................................................................................... 52 Appendix A: Input Data .................................................................................................... 55 Appendix B: DEA Weight Results ................................................................................... 59 Appendix C: DEA RAM Results ...................................................................................... 60 Appendix D: Calculating the Gini Measure ...................................................................... 63 Appendix E: DEA RAM with Equity Results .................................................................. 66 viii List of Tables Table 1.Number of users at each EBAIS .......................................................................... 34 Table 2. Inputs for each EBAIS, year 2011, area of health Goicoechea 2 ....................... 38 Table 3. Outputs for each EBAIS, year 2011, area of health Goicoechea 2 ..................... 39 Table 4. Districts served at area of health Goicoechea 2 .................................................. 40 Table 5. District assignment per EBAIS at area of health Goicoechea 2 ......................... 41 Table 6. Summary of the NBI incidences per district and grouping. ............................... 43 Table 7. Efficiency scores for the EBAIS obtained by the DEA methodology. ............... 44 Table 8. Comparison of the results of the DEA-RAM model between the previous period’s budget and the current budget to allocate for the next period ............................ 45 Table 9. Equity constraints for each EBAIS, year 2011, area of health Goicoechea 2 .... 46 Table 10. Gini measure per equity unit ............................................................................. 47 Table 11. Optimal solutions per scenario, DEA-RAM with equity .................................. 48 Table 12. Annual costs in colones for each of the EBAIS at area of health Jimenez Nunez, 2011 ...................................................................................................................... 55 Table 13. Annual costs in colones for each of the EBAIS in area of health Jimenez Nunez, 2011 ...................................................................................................................... 56 Table 14. Annual costs in dollars for each of the EBAIS at area of health Jimenez Nunez, 2011................................................................................................................................... 57 ix Table 15. Total time in hours per month programmed and used for medical appointments at area of health Jimenez
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