Data Envelope Analysis: A Tool for Measuring Cost Effectiveness in Today’s Challenging Healthcare Environment

Authors: Lewis AN*

DOI: 10.23880/jqhe-16000406

Volume 7, Issue 5

Abstract

Healthcare in the 21st century in the United States operates in a challenging environment. That environment presents a host of pressures such as increasing demands for services due to population growth, payors persistent denial of calls to expand funding for healthcare services, and constant calls for improved service quality within same levels of resources. Data Envelope Analysis (DEA) is an analysis tool that is versatile in that with proper conceptualization of service outputs (i.e., measures of service productivity) and service inputs (operational resources) can provide a relative picture of cost effectiveness among a cohort of competing healthcare service providers. Such cost effectiveness can include many variables that do not have compatible units of measurement, and DEA handles such situations. The DEA output also offers clues on how to modify the output and input mix to improve cost effectiveness. DEA is a beneficial analysis tool to measure healthcare service effectiveness.

Keywords: Healthcare; Cost Effectiveness; Benefit-Cost Analysis; Economic Evaluation

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