1. GOLIK Natalia
RELLAMA Anna

2. Overview

 Some terminologies related to DEA
 DEA and its History
 What DEA is and where it can be applied
 What makes DEA different from all the other
methods
 The DEA Model and its Constraints
 An example related to Health Care Service
Management

3. Terminologies

 EFFICIENCY - using the minimum number of inputs
for a given number of outputs
 INPUT – work hours, condition of patient, supplies
 OUTPUT – final condition of the patient, visits
 LINEAR PROGRAMMING
 A mathematical technique for maximizing or
minimizing a linear function of several variables, such
as output or cost (Webster).

4. How it came to be

 1980s – Improved the efficiency of health care
delivery through fixed pricing mechanism of DRGs
(diagnostic related groupings).
 1990s – Extended to physicians’ services
 There was a need for a greater understanding
because of physician specialization; the systems were
too different.
Data Envelopment Analysis
By Charnes et al.

5. What is DEA?

 Data Envelopment Analysis
 A linear programming application aimed at evaluating
the efficiencies of similar decision-making units
(DMUs) based upon the inputs and outputs associated
with the DMUs.

6. Why use the DEA?

 It can help managers:
 Assess their organization’s relative performance,
and identify top performance in the health care
market, and
 Identify ways to improve
their performance, if their
organization is not one of
the top performing
organizations.

7. It’s all about evaluating
EFFICIENCY.

 What does it mean to be efficient?
 Maximizing output with keeping input constant.
 Minimizing input with keeping output constant.
 Or both, at the same time.
 How?
 Efficiency scores – a score attained through the
DEA method ranging from 0 to 1, with 1 being the
most efficient.
 Total weighted Output / Total weighted Input

8. What makes it different

 It identifies the optimal ways of performance rather
than the averages.
 In today’s world, no health care institution can
afford to be an average performer in a competitive
health market.

9. Necessary

 The DEA model
 A list of the inputs
 A list of the outputs
 The program
 You can make one on your own, but you can also
hire someone to make it for you. It can also be
bought or downloaded legally online.

10. The Model
 Selected output
of each facility
Efficiency in the set o.
Objective
score
Weights
Formula Selected input
of each facility
in the set o.

11. The Constraints

The input and output
values, as well as all
weights are assumed by
the formulation to be
greater than or equal to
zero; the efficiency score
less than or equal to 1.

12. Example


17. Which inputs need to be
reduced to increase efficiency
in H2, H6, H7 and H10?
How do we know which of the
inputs need improvement?
How do we know which of the
outputs need augmenting?
SLACKS

19. Let’s wrap it up!

 Data Envelopment Analysis is a method that health
care service managers can use to evaluate the
efficiency of each of their decision making units
(DMUs).
 It is helpful in determining whether your
management system is among the most efficient and,
if you are not the most efficient, how you can
improve the efficiency of your DMUs.

20. References


Ozcan, Yasar. Health Care Benchmarking and Performance Evaluation: An Assessment using Data Envelopment Analysis
(DEA). 2008.
 Ozcan, Yasar. Quantitative Methods in Health Care Management: Techniques and Applications. San Francisco, California:
2009.
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