Efficiency and Productivity Change of Public Hospitals in Panama: Do Management Schemes Matter?

In Latin American and Caribbean countries, the main concern of public health care managers has been traditionally placed on problems related to funding, payment mechanisms, and equity of access. However, more recently, there is a growing interest in improving the levels of efficiency and reducing costs in the provision of health services. In this paper we focus on measuring the technical efficiency and productivity change of public hospitals in Panama using bootstrapped Malmquist indices, which allows us to assess the statistical significance of changes in productivity, efficiency, and technology. Specifically, we are interested in comparing the performance of hospitals belonging to the two different management schemes coexisting in the country, the Social Security Fund (SSF) and the Ministry of Health (MoH). Our dataset includes data about 22 public hospitals (11 for each model) during the period between 2005 and 2015. The results showed that the productivity growth of hospitals belonging to the SSF has been much higher than that of the hospitals belonging to the Ministry of Health over the evaluated period (almost 4% compared to 1.5%, respectively). The main explanation for these divergences is the superior growth of technological change in the former hospitals, especially in the final years of the evaluated period.