Technical efficiency decomposed - The case of Ugandan referral hospitals

PurposeIn an audit report provided to the Ugandan Parliament by the Office of the Audit General, Uganda, technical efficiency in Ugandan referral hospitals was measured and analysed. The audit report pointed out that there was a relatively low level of technical inefficiency, at least in comparison with other African countries. The purpose of this study is to look further into the issue of why there is inefficiency. Design/methodology/approachWe use a Data Envelopment Analysis framework and decompose long-run technical efficiency into short-term technical efficiency, scale efficiency and congestion. Originality / value of the article:Even though there are a substantial amount of research on efficiency in African hospitals, no other study have investigated existence of congestion. In that respect our research contributes to the existing research. FindingsOur results reveal that the source of the long-run inefficiency varies over the years. For 2012, more than 50% of the observed inefficiency relates to scale factors. However, in 2013 and 2014 the major contributor to the long-run inefficiency was input congestion. Implication of the reserachWe recommend that inefficient hospitals should use efficient hospitals as benchmarks for improving their own efficiency. Further, since a large part of the technical inefficiency relates to congestion we recommend further investigation to identify factors in the production, or organisation that could be related to congestion.