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Data Envelopment Analysis


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Data Envelopment Analysis

  1. 1. GOLIK NataliaRELLAMA Anna
  2. 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. 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. 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. 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. 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. 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. 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. 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. 10. The Model  Selected output of each facility Efficiency in the set o.Objective score WeightsFormula Selected input of each facility in the set o.
  11. 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. 12. Example 
  13. 13. Which inputs need to bereduced to increase efficiencyin H2, H6, H7 and H10?How do we know which of theinputs need improvement?How do we know which of theoutputs need augmenting? SLACKS
  14. 14. 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.
  15. 15. 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. Images from:   nid=NnHbs71ezGSd- M:&imgrefurl= TtaIMMfKsganodXxBA&zoom=1  imgrefurl= kNlfTvWMKcn4sgbUocnyBA&zoom=1  mgrefurl= HxBA&zoom=1  M:&imgrefurl= WpJHPONwM-M&w=288&h=276&ei=pNlfTozQFsvJswaIwrzxBA&zoom=1  &imgrefurl= bordel/&docid=WNHfy6QRhVmnUM&w=425&h=283&ei=rdlfTtnoJI3MswaT643yBA&zoom=1