Pabon Lasso and Data Envelopment Analysis: A Complementary Approach to Hospital Performance Measurement

BACKGROUND: Performance measurement is essential to the management of health care organizations to which efficiency is per se a vital indicator. Present study accordingly aims to measure the efficiency of hospitals employing two distinct methods. METHODS: Data Envelopment Analysis and Pabon Lasso Model were jointly applied to calculate the efficiency of all general hospitals located in Iranian Eastern Azerbijan Province. Data was collected using hospitals’ monthly performance forms and analyzed and displayed by MS Visio and DEAP software. RESULTS: In accord with Pabon Lasso model, 44.5% of the hospitals were entirely efficient, whilst DEA revealed 61% to be efficient. As such, 39% of the hospitals, by the Pabon Lasso, were wholly inefficient; based on DEA though; the relevant figure was only 22.2%. Finally, 16.5% of hospitals as calculated by Pabon Lasso and 16.7% by DEA were relatively efficient. DEA appeared to show more hospitals as efficient as opposed to the Pabon Lasso model. CONCLUSION: Simultaneous use of two models rendered complementary and corroborative results as both evidently reveal efficient hospitals. However, their results should be compared with prudence. Whilst the Pabon Lasso inefficient zone is fully clear, DEA does not provide such a crystal clear limit for inefficiency.