Technical Efficiency of Tanzania Teaching Hospitals: The Case of Private not for-profit Hospitals

Abstract

In this study, we examined the technical efficiency of private teaching hospitals in Tanzania. We employed a widely used non-parametric approach (Data Envelopment Analysis) in a sample of 18 teaching hospitals. The study period covered 2009 – 2013. The result from this study is expected to be useful to the owners and administrators of teaching hospitals, giving them justification for effective planning and implementation of the strategies that will avoid abuse of the available scarce health resources. Government and policy makers may also reap some inputs (from result of this study) for health policies, particularly pertaining to research and the training of future medical experts.

Findings revealed that out of 18 teaching hospitals, only 4 (22.3%) are operating close to technical efficiency with average level of technical efficiency ranging between 92% and 98%. The remaining 14 hospitals are operating far from efficiency frontier. Overall mean scale efficiency were found to be 82.4%. With support of DEA this study has revealed inefficiency in the use of scarce health care resources in teaching hospitals in Tanzania. This requires the hospitals administrators and managers to consider steps to be taken to improve inefficiency.