Assessing the Overall Technical Efficiency, Pure Technical Efficiency, and Scale Efficiency of United States Department of Defense Hospitals

Abstract

Introduction: This study aims to evaluate US Department of Defense hospital efficiency. Methods: Drawing on the American Hospital Association’s annual survey data, the study employs data envelopment analysis, slack analysis, and the Malmquist Productivity Index to identify the differences in hospital efficiency between Air Force, Army, and Navy hospitals as well as the trends of their efficiency from 2010 to 2021. Results: US Department of Defense hospitals operated inefficiently from 2010 to 2021, although the average technical efficiency of all DOD hospitals increased slightly during this period. The inefficiency of all US Department of Defense hospitals may be due to the lack of pure technical efficiency rather than the suboptimal scale. However, as the efficiency trends in Navy hospitals differ from those in Army and Air Force hospitals, we should be careful in addressing the inefficiency of each type of US Department of Defense hospital. Conclusion: Informed by the findings, this study enhances our understanding of US Department of Defense hospital efficiency and the policy implications, offering practical advice to healthcare policymakers, hospital executives, and managers on managing military hospitals.