Technical Efficiency and Total Factor Productivity Growth in Uganda’S District Referral Hospitals

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Technical Efficiency and Total Factor Productivity Growth in Uganda’S District Referral Hospitals TECHNICAL EFFICIENCY AND TOTAL FACTOR PRODUCTIVITY GROWTH IN UGANDA’S DISTRICT REFERRAL HOSPITALS By Bruno Lule Yawe A Thesis Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy (Economics) of the University of Dar es Salaam University of Dar es Salaam September, 2006 ii CERTIFICATION The undersigned certify that they have read and hereby recommend for acceptance by the University of Dar es Salaam a thesis entitled: Technical Efficiency and Total Factor Productivity Growth in Uganda’s District Referral Hospitals, in partial fulfillment of the requirements for the degree of Doctor of Philosophy (Economics) of the University of Dar es Salaam. ---------------------------------------------- Prof. Nehemiah E Osoro (Supervisor) Date: ------------------------ ---------------------------------------------- Dr Rowena Jacobs (Supervisor) Date: ------------------------ iii DECLARATION AND COPYRIGHT I, Bruno Lule Yawe, declare that this thesis is my own original work and that it has not been presented and will not be presented to any other University for a similar or any other degree award. Signature: ………………………….. This thesis is copyright material protected under the Berne Convention, the Copyright Act 1999 and other international and national enactments, in that behalf, on intellectual property. It may not be reproduced by any means, in full or in part, except for short extracts in fair dealing, for research or private study, critical scholarly review or discourse without prior written permission of the Directorate of Postgraduate Studies, on behalf of both the author and the University of Dar es Salaam. iv ACKNOWLEDGEMENTS Many institutions and persons have contributed in myriad ways toward the completion of this thesis specifically, and the PhD program, in general. These institutions and persons are too many to be acknowledged individually in the limited space. As a consequence, from the outset I register my heartfelt appreciation to all those persons and institutions who contributed to the entire PhD program becoming a reality. To all those institutions and persons, I say a big thank you. Nevertheless, there are individuals who deserve special mention without implication. First and foremost, I would like to take this opportunity to thank the African Economic Research Consortium for funding my PhD studies and for partial funding of this research project. I feel deeply honored to be a recipient of this scholarship award. Additional financial support from Makerere University under project No: Carnegie/Mak/2005/0036, is gratefully acknowledged. My thesis supervisors Prof. Nehemiah E Osoro and Dr Rowena Jacobs have been the best supervisors every doctoral candidate could ever wish for. Besides being very supportive and helpful whenever things seemed difficult, Nehemiah and Rowena have always been there for me and their parental advice and support have been a necessary and sufficient condition for this dissertation to exist. I thank them most heartily. Special thanks are due to my employer – Makerere University, for granting me a study leave which ensured uninterrupted progress on the PhD program. More specifically, encouragement, support, inspiration and advice, by the Dean, Faculty of Economics and Management - Prof. J Ddumba-Ssentamu, is gratefully acknowledged. v My lecturers at the University of Dar es Salaam, Department of Economics and the Collaborative PhD Program (CPP) Joint Facility for Electives (2003), for a job well done in shaping my thoughts that ultimately led to this study. In addition, my appreciation goes to the staff of the Department of Economics and the Economic Research Bureau, University of Dar es Salaam, for providing me with a cordial working environment. Let me also say ‘thank you’ to the following people: The then Director General of Medical Services, Ministry of Health, Prof. Francis Omaswa for clearing this study; The Medical Superintendents, Hospital Administrators, staff of Records Departments, in the sample hospitals for maximum cooperation in gathering the necessary data; the patients on whom data were collected; colleagues at the Faculty of Economics and Management, Makerere University, for the encouragement and support; Dr Rowena Jacobs, Prof. Peter C Smith and Dr Andrew Street, The University of York, for training in the measurement of efficiency in public sector organizations; Prof. Paul Wilson, University of Texas for providing me with the ‘FEAR’ software package; Prof. Bruce Hollingsworth, Faculty of Business and Economics, Monash University; Dr Kirigia, WHO Regional Office for Africa, Congo Brazaville for providing me with African healthcare facility efficiency studies; Dr. EA Zere, WHO Namibia; Pantaleo Kessy, University of Colorado; thanks also go to Geraldine G Duwe and Clara G Karungi for research assistance. Support from colleagues in the CPP class of 2002 at the University of Ibadan (Nigeria), Yaounde II (Cameroun) and the University of Dar es Salaam (Tanzania) is gratefully acknowledged. Specifically, collaboration from the ‘Dar Group’ – Tchaka Ndlovu, Asmah E Ekow, Eria Hisali, Nassor S Nassor, Felician Mutasa, Maureen vi Were and Jehovaness U Aikaeli, was invaluable for the completion of the program. I thank you guys most sincerely for being there for us fulltime. Last but not the very least, I would like to thank my family: my parents, my wife Grace, children: Alice-Martha, Pamela-Ann, Patricia-Ann and Pantaleo. Your support in terms of patience, understanding, love and encouragement, has been invaluable and without it, this thesis would not exist. Heartfelt thanks go to my brothers: Emmanuel, Frank, Kizito, sisters: Dorothy, Zoe, Norah, Rose, Immaculate, Resty, Teddy, Agnes, and Carol, for all the support. Finally, notwithstanding the support, encouragement and inspiration from the above persons and institutions, this study and the PhD program in general, would be impossible to complete without the wisdom, good health, and resilience from the Almighty God. I will thank you and praise you for ever. The usual disclaimer applies. None of the acknowledged institutions and persons are responsible for any errors, inadequacies and omissions in this study. They remain my responsibility. vii DEDICATION I dedicate this work to my parents, who brought me to this world and have guided me; To the Almighty God, who has comforted me at all times; To my loving wife Grace, who has stood by me at all times; To our lovely children: Alice-Martha, Pamela-Ann, Patricia-Ann, and Pantaleo, who have been and are the joy of my life. viii ABSTRACT The study measures the technical efficiency and total factor productivity growth of 25 district referral hospitals from three regions of Uganda over the 1999-2003 period. This study is motivated by a desire to evaluate the ongoing health sector reforms in Uganda which in part are seeking to improve the efficiency of health services. Nonparametric Data Envelopment Analysis (DEA) is used in the measurement of hospital technical efficiency whilst the DEA-Malmquist index is used in the measurement of hospital total factor productivity change. The Hospital Management Information System launched in 1997 is the source of the data for this study. The results indicate the existence of different degrees of technical and scale inefficiency in Uganda’s district referral hospitals over the sample period. There were productivity losses for the sample hospitals which are largely due to technological regress rather than technical inefficiency. Thus, changes in technology are needed if the hospitals are to become more productive, for instance through improved diagnosis tests, hospital information management. The findings illustrate one of the advantages of the frontier efficiency technique, namely the ability to identify the degree of emphasis that should be placed on improving technical efficiency vis-à-vis technological change. The study adds to the existing literature on health facility efficiency but additionally incorporates patient deaths in the measurement of hospital technical efficiency. Additionally, heterogeneity in the patient load is controlled for via a length of stay-based case-mix index. Quality of care was incorporated into the analysis by means of patient deaths. Super-efficiency was conducted to further distinguish between the technically efficient hospitals. To construct confidence intervals for individual hospitals technical efficiency scores, nonparametric bootstrapping was conducted. The efficiency vectors yielded have ready uses by policymakers in the hospital sector. Indicators of the relative efficiency of hospitals are needed to gauge whether hospital cost-containment efforts are succeeding, amongst other uses. ix TABLE OF CONTENTS Page Certification......................................................................................................................ii Declaration and Copyright............................................................................................ iii Acknowledgements..........................................................................................................iv Dedication .......................................................................................................................vii Abstract......................................................................................................................... viii Table of Contents ............................................................................................................ix List of Tables
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