Analysis of profit efficiency of corporate hospitals in India during COVID-19 – An DEA-MPI based approach

ABSTRACT

Healthcare organizations must operate efficiently to provide affordable care without compromising their sustainability and competitiveness. The purpose of this is to measure the profit efficiency of select Indian Corporate Hospitals during the COVID-19 pandemic. Further, the study attempts to analyze the productivity changes in select corporate hospitals during COVID-19 and postimplementation of the national insurance policy in India. The study used the Data envelopment analysis (DEA) technique to measure the efficiency of corporate hospitals. It utilizes Constant Return to Scale (CRS), and Variable Return to Scale (VRS) to estimate profit inefficiency. DEA-based Malmquist Productivity Index (MPI) was used to examine the productivity change during the last three years since the outbreak of COVID-19. The DEA-MPI model is iterated for panel data for Financial Year 2018–2021. with year-wise employee benefits and operating expenses as the input parameters and year-wise net sales as the output parameter. The study reveals surprising results and requires critical analysis. Out of select hospitals, 80% of hospitals were found inefficient using CRS while 70% of the hospitals were found inefficient using VRS. The findings of this study are useful for healthcare administrators and managers to highlight improvement programs for efficiency maximization

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KEYWORDS:

• Technical efficiency
• profit efficiency
• operating ratio
• data envelopment analysis
• total factor of productivity
• malmquist productivity index

Acknowledgements

The infrastructural support provided by the FORE School of Management, New Delhi in completing this paper is gratefully acknowledged.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

The author(s) reported there is no funding associated with the work featured in this article.

Notes on contributors

Vinaytosh Mishra

Vinaytosh Mishra is working as Associate Professor at College of Healthcare Management and Economics, Gulf Medical University, Ajman, UAE.

Jagroop Singh

Jagroop Singh is working as Assistant Professor at College of Healthcare management and Economics, Gulf Medical University, Ajman, UAE.

Sourabh Kulkarni

Sourabh Kulkarni is working as Assistant Professor at FORE School of Management, New Delhi, India.

Susheel Yadav

Susheel Yadav is working as Assistant Professor at Jindal Global Business School, O.P. Jindal Global University, Sonipat, India.