How can you measure healthcare management efficiency?

1 Dimensions of efficiency

Efficiency can be measured at different levels, such as the system, the organization, the process, or the individual. It can also be assessed from different perspectives, such as the provider, the payer, the patient, or the society. Moreover, efficiency can be evaluated in terms of inputs, outputs, or outcomes. Inputs are the resources used to deliver healthcare, such as staff, equipment, or drugs. Outputs are the products or services delivered, such as consultations, procedures, or tests. Outcomes are the effects or impacts of healthcare on health status, quality of life, or satisfaction.

2 Methods of measurement

Various methods and techniques are employed to measure efficiency, each having its own benefits and drawbacks. Ratio analysis, for instance, looks at the inputs and outputs of a healthcare unit or activity such as cost per patient, revenue per bed, or length of stay per diagnosis. Benchmarking, on the other hand, compares the performance of a healthcare unit or activity with that of a similar or best-in-class unit or activity, either internally or externally. Data envelopment analysis (DEA) utilizes mathematical models to estimate the optimal or efficient frontier of a set of healthcare units or activities and identify the sources and magnitude of inefficiency for each unit or activity. Lastly, Balanced scorecard (BSC) is a strategic management tool that integrates multiple measures of efficiency along with other dimensions of performance such as quality, safety, or innovation into a comprehensive dashboard that aligns with the vision and goals of the healthcare unit or activity.

3 Challenges of measurement

Measuring efficiency is a complex and uncertain task, and it comes with many challenges. Data availability and quality, attribution and causality, and trade-offs and value judgments are all issues that need to be taken into account. Reliable, accurate, and timely data on inputs, outputs, and outcomes may not always be available. Furthermore, it can be difficult to determine the relationship between these elements when multiple factors or interventions are involved. Additionally, trade-offs and value judgments can lead to subjective or disputed opinions between stakeholders.

4 Best practices and tools

Measuring efficiency is essential to improve the quality and performance of healthcare systems and organizations, despite the challenges. To do this effectively and efficiently, you should start by defining why, what, and how you want to measure it, as well as who will be involved or affected. Additionally, a mixed-methods approach should be used to capture complexity and diversity, combining quantitative and qualitative methods. Furthermore, communicating and engaging with stakeholders throughout the process from planning to reporting is key to gaining their input, feedback, and support. Finally, monitoring and improving your efficiency measurement regularly based on results and feedback will help identify gaps, issues, or opportunities.

5 Tools for measurement

A wide range of tools and resources are available to help you measure efficiency, depending on your needs and preferences. The Agency for Healthcare Research and Quality (AHRQ) has developed a website, Health Care Efficiency Measures, that offers a comprehensive inventory of measures, along with their definitions, sources, methods, and applications. The World Health Organization (WHO) has published a book, Health Systems Efficiency, that provides a conceptual framework and practical guidance on measuring and improving health system efficiency. The Organisation for Economic Co-operation and Development (OECD) has created a collection of data and tools, Health Care Efficiency Data and Tools, with comparative and analytical information on health care efficiency across countries, as well as indicators, reports, and publications.