Discussion
The technical and economic efficiency of medical diagnostic laboratories of hospitals affiliated with the UUMS was estimated via SFA under VRS and input-oriented minimization assumption by estimating production and cost functions in order to evaluate their performance.
The low technical efficiency of medical diagnostic laboratories of the hospitals indicated the high capacity of inputs in these units. While using the same level of inputs, these units can increase their outputs and thus their technical efficiency by 48.1% without any increase in costs.
The average economic efficiency of the above-mentioned units was 0.931. Therefore, the efficiency of these units can be improved by reducing costs by 6.9% without decreasing the value of outputs by increasing the profit. In other words, the managers of these laboratories must reduce their costs by optimally combining and distributing inputs, while taking into account the prices of the used inputs to approach the profitability frontier.
The average economic efficiency of laboratory units was higher than the average technical efficiency, which demonstrates the high allocative efficiency of these units; that is, the combination of inputs in these units is appropriate. However, service providers in these units can make the most of this combination to increase service delivery without changing the amount of inputs in order to increase technical efficiency. Therefore, in order to reduce costs and increase their profits, the above-mentioned laboratory units should avoid wasting resources by enhancing the motivation of the staff and the awareness of the general principles of medical diagnostic laboratories.
Furthermore, medical diagnostic laboratories of university hospitals had an increasing return to scale. In other words, the coefficient of function or degree of homogeneity was >1; that is, if inputs are increased by 1%, the output of laboratories will increase by more than 1%. Therefore, the laboratories under study should increase their supply of services.
Alinejhad et al. in a study entitled “Evaluating the economic efficiency of clinical laboratories in Iranian public hospitals via DEA method” achieved the average economic efficiency of 0.676.1 The results of examining the economic efficiency of laboratory units in hospitals affiliated with the UUMS by using DEA and SFA methods showed that the average economic efficiency of the units differed in the two methods (0.255). This difference could be due to neglecting random effects, measurement errors, etc. in the DEA method. In general, however, the average economic efficiency of the studied units in the province is medium to high, indicating that in the studied units, it is possible to increase economic efficiency by reducing costs without affecting output values.
After examining the efficiency of Australian hospitals by using DEA and SFA, Mortimer et al. concluded that each method of efficiency measurement has its own characteristics, and there is no single method for measuring the efficiency whose results would be more precise and reliable compared to other methods.13
In a study entitled “Analyzing the efficiency changes of Irish hospitals”, Gannon concluded that the technical efficiency values obtained from the DEA method were higher than the SFA method; that is, the inefficiency in the DEA method was underestimated.19
In a study entitled “Evaluating the economic efficiency of CCU in hospitals affiliated with Tehran University of Medical Sciences”, Zahavi et al. used both SFA and DEA methods and concluded that these two methods do not necessarily have the same results in calculating efficiency, and greater efficiency in one of these methods is not sustainable for all sectors.20
Lamovsek et al. determined the optimal size of medical laboratories at the primary healthcare level by using DEA. The average technical efficiency of the laboratories with the VRS assumption was obtained as 0.9333. The authors concluded that increasing the automation and consolidation of laboratory activities can affect the efficiency of laboratories and, thus, costs.4
In evaluating the technical efficiency of the clinical laboratories of Shiraz University of Medical Sciences, Taheri et al. reported the average technical efficiency of laboratory units to be 0.92416, which indicates a high level of technical efficiency in hospital units of Shiraz compared to Urmia.
In general, SFA is a useful tool for analyzing the efficiency of medical diagnostic laboratories, and its information may be useful for policy-making and performance evaluation of these units. The DEA and SFA methods are also complementary in efficiency measurement, but for efficiency measurement, it is recommended that the SFA method be first performed in order to identify the variables having a negative effect and to exclude them from the model.
One of the limitations of this study was the lack of participation of the private sector diagnostic laboratories. Better analysis and conclusions could be obtained from the efficiency status of provincial laboratories had these laboratories cooperated, and the health planners in the province could have used better data for decision making.