Are public hospitals reforming efficiently in West Bank?

The structure, function, and capacity of the health care system in the Occupied Palestinian Territories (OPT) had been largely shaped by the complex political history of the country. Since the establishment of the Palestinian Authority in 1994, the reform efforts were subsidized much by the international aids to rebuild the country's institutional capacity. No previous studies have provided a realistic evaluation of Palestinian achievements in the conduct of public healthcare, we examine the relative productive efficiency of public hospitals (their managers' success in the usage of resources) during 2010-2015 within West Bank and Jordan. Then, we estimate the efficiency of policies within which managers operate (the program efficiency) across the two countries.

We employ the Data Envelopment Analysis (DEA) models to distinguish between within-country managerial efficiencies and public policy "program" efficiencies across the two countries. The study follows two key steps, the first step evaluates managerial efficiencies and explores trends in performance within each country. Then, we examine the program efficiencies across the two countries.

Public hospitals improved their year-specific overall efficiency from 75 to 80% in the West Bank and from 78 to 86% in Jordan in 2010 and 2015 respectively. Changes in efficiency are driven by scale effects in West Bank and by managerial enhancements in Jordan. Program efficiency in West Bank outperformed Jordan during 2010-2012, there was no significant difference in mean program efficiencies between the two countries during 2013-2015.

This work addresses a gap in the DEA literature by empirically investigating the efficiency of public hospitals as distinct from program efficiency in a developing country, namely, Palestine. Findings stimulate hospital managers to enhance potential improvements, policymakers to allocate resources, and international donors to focus on the right adoption of new technology to get better benefits from their considerable investments in public hospitals.