Improving the Efficiency of a Public Health Service by Designing Its Innovation Management Structure Based on Data Envelopment Analysis

Improving the Efficiency of a Public Health Service by Designing Its Innovation Management Structure Based on Data Envelopment Analysis

Oscar Barros, Ismael Aguilera
DOI: 10.4018/IJSSMET.315583
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Abstract

This paper presents a proposal for Chile's health system innovation structure based on a formal service design approach, including management and process architecture definition. Such structure defines how to allocate innovation resources in the health system to increase its efficiency. It uses data envelopment analysis (DEA) to measure hospitals' efficiency, which also determines the variables that explain such efficiency. Thus, the architecture uses the knowledge about hospitals' efficiency and their determinants to define innovation projects and assign financial resources for them. It also assures their implementation to increase the efficiency of the hospitals. DEA measurements show great improvement potential since only six of 40 hospitals had an efficiency value of 1.0. Some of the projects with the best improvement potential were implemented with very good results, summarized in the paper. The main contribution of this work is to formalize and enlarge the scope of the structural design of health services to generate improved results for users at a lower cost.
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1. Introduction

The research on design approaches to increase the efficiency of health service systems has many variants. Thus, in specific situations, the design centers on care pathways that are analyzed and improved with mostly qualitative methods, as in published cases on pathways for chronic and integrated care (Valentijn, Schepman & Opheij, 2013; Korner, Butof & Muller, 2016). The next level of complexity is to consider structural changes for a full health system, such as implementing new care models across primary care, community services, and hospitals in England (Starling, 2018). Further complexity occurs when doing a full redesign of a health system, changing its structure, as reported for some USA and European hospitals (Lee & Porter, 2013; Nolte et al., 2016; van Harten, 2018). For example, a functional health structure changed into integrated practice units with specialized care lines –e.g. low back pain– in a USA hospital, replacing teams and pathways (Lee & Porter, 2013) and the design of specialized services lines for an Emergency Service in Chile (Barros, 2019).

This work concentrates on the redesign of a full health system and uses a set of tools that have been useful in practice to generate and analyze service systems’ alternative management structures (Barros, 2021; Trad, 2021; Mora et al., 2011). The specific case considered is the design of the structure that manages resources assigned to innovation initiatives for increasing the efficiency of the Chilean network of hospitals.

In Chile, resource allocation to public hospitals uses the idea of ‘management commitments’, which are goals measured by the number of medical interventions of different types a hospital promises to execute to receive a certain amount of resources in any given year. This method fails to set goals that consider the true capacity of the hospitals and provides no incentive to do more than the goal. Therefore, there is no guarantee that hospitals operate at the right efficiency level, according to the resources they have. Thus, the idea is to measure the efficiency of hospitals using Data Envelopment Analysis (DEA), a mathematical technique widely used in health (Hollingsworth, 2008; Sherman & Shu, 2006, 2013; Ozcan, 2014; Kohl et al.,2018). DEA identifies the least efficient hospitals that present the best opportunities to improve their performances, and efficiency measurements’ results indicate how to improve them to get the best results. Subsequently, the proposal is to design an organizational structure that coordinates the assignment of innovation resources, based on DEA results, to define and implement improvement projects for inefficient hospitals. This design innovates the traditional use of DEA, which emphasizes analysis but does not consider specific improvement projects and a structure to manage them (Ozcan, 2014; Barpanda & Sreekumar, 2020). The methodology used for structure design concentrates on the Enterprise Architecture (EA), reviewed later, which defines the organization’s units and the processes needed to manage the global improvement of the hospital network, a need also justified by Baporikar & Randa, 2020. This organization will redefine the assignments of funds to hospitals to generate innovation initiatives, with incentives to change their practices and increase efficiency. Modern Analytics, reviewed in the next section, is also present in the architecture to automate or give support to the architecture components defined later.

In summary, the proposal is to design a new organizational structure for the health service system to generate innovation projects, using DEA’s ideas above, and to provide resources and local capabilities to the hospitals to execute such projects. A justification of such a structure is in the next section, where a review of the methods that support its design is included. This design idea is not only applicable to health, but other public services, such as education, social, and justice can use the proposed approach to increase efficiency.

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