Biomedical Statistics and Informatics

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An Empirical Investigation on the Efficiency of Healthcare Companies with Data Envelopment Analysis Model

Received: 24 October 2016    Accepted: 02 December 2016    Published: 07 January 2017
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Abstract

Healthcare service quality plays an important role in today’s competitive environment. The people are very concern on their health status nowadays and willing to seek an affordable treatment from the healthcare companies. Besides affordable treatment, the people are also particular on the healthcare efficiency as the quality of the services and companies performance aresignificantly determined by the company’s efficiency. Data Envelopment Analysis (DEA) is a mathematical linear programming model which is utilized for measuring the efficiency of the companies as the ratio of the sum-weighted outputs to sum-weighted inputs. The objective of this study is to evaluate and compare the efficiency of the healthcare companies in Malaysia withDEA model. In this study, the data consists of 12healthcare companies that are listed in Malaysia stock market. The period of study is from year 2011 until 2015. The results of this study show thatAHEALTH, HAIO, IHH, PHARMA and YSPSAH are ranked as efficient healthcare companies. This study is significant because the DEA model helps to identify the efficient healthcare companies based on multiple inputs and outputs.

DOI 10.11648/j.bsi.20160101.13
Published in Biomedical Statistics and Informatics (Volume 1, Issue 1, December 2016)
Page(s) 19-23
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Healthcare Company, Data Envelopment Analysis, Efficiency, Linear Programming Model

References
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[3] V. K. Omachonu, and N. G. Einspruch, “Innovation in Healthcare Delivery Systems: A conceptual framework,” The Innovation Journal: The Public Sector Innovation Journal, Vol. 15, pp. 1-20, 2010.
[4] E. H. Feroz, S. Kim, and R. L. Raab, “Financial statement analysis: A Data Envelopment Analysis approach,” The Journal of the Operational Research Society, Vol. 54, pp. 48-58, 2003.
[5] A. Charnes, W. W. Cooper, and E. Rhodes, “Measuring the efficiency of decision making units,” European Journal of Operational Research, Vol. 2, pp. 429-444, 1978.
[6] A. A. Kamil, and P. L. Ong, “Data Envelopment Analysis for stocks selection on Bursa Malaysia,” Archives of Applied Science Research, Vol. 2, no. 5, pp. 11-35, 2010.
[7] C. Jehu-Appiah et al., “Ownership and technical efficiency of hospitals: Evidence from Ghana using Data Envelopment Analysis,” Cost Effectiveness and Resource Allocation, Vol. 12, 2014.
[8] J. Akazili, M. Adjuik, C. Jehu-Appiah, and E. Zere, “Using Data Envelopment Analysis to measure the extent of technical efficiency of public health centres in Ghana,” BMC International Health and Human Rights, Vol. 8, pp. 11-22, 2008.
[9] A. Rai, “Measurement of efficiency in the airline industry using Data Envelopment Analysis,” Investment Management and Financial Innovation, Vol. 10, pp. 38-45, 2013.
[10] Y. L. Huang, I. F. Lee, and Y. H. Lee, “Modeling operational efficiency using Data Envelopment Analysis: Evidence from Atlantic City Hotels,” Global Journal of Business Research, Vol. 6, no. 3, pp. 63-72, 2012.
[11] L. Asandului, M. Roman, and P. Fatulescu, “The efficiency of healthcare systems in Europe: A Data Envelopment Analysis approach,” Procedia Economics and Finance, Vol. 10, pp. 261-268, 2014.
[12] A. R. Hernandez, and M. S. Sebastian, “Assessing the technical efficiency of health posts in rural Guatemala: A Data Envelopment Analysis,” Global Health Action, Vol. 7, pp. 1-9, 2014.
[13] V. G. Valdmanis, M. D. Rosko, H. Leleu, and D. B. Mukamel, “Assessing overall, technical, and scale efficiency among homehealth care agencies,” Health Care Management Science, pp. 1-11, 2016.
[14] Bursa Malaysia. (n.d.) Company Announcements Bursa Malaysia Market. [online] Available at: [Accessed 19 October 2016].
[15] J. E. Price, M. D. Haddock, and H. R. Brock, College accounting. 10th ed., New York, Macmillan/McGraw-Hill, 1993.
[16] P. Östring, Profit-Focused Aupplier Management. United State, American Management Association International, 2003.
[17] O. Akguc, Financial statement analysis. 13rd ed, Istanbul, Arayis Publication, 2010.
[18] C. P. Jones, Investments analysis and management. 12nd ed., Asia, John Wiley & Sons, 2013.
[19] M. M. Martic, M. S. Novakovic, and A. Baggia, “Data Envelopment Analysis – Basic models and their utilization,” Organizacija,Vol. 42, no. 2, pp. 37-43, 2009.
Author Information
  • Department of Physical and Mathematical Science, Faculty of Science, UniversitiTunku Abdul Rahman, Kampar Campus, Kampar, Malaysia; Centre for Mathematical Sciences, Centre for Business and Management, UniversitiTunku Abdul Rahman, Kampar Campus, Kampar, Malaysia

  • Department of Physical and Mathematical Science, Faculty of Science, UniversitiTunku Abdul Rahman, Kampar Campus, Kampar, Malaysia

  • Department of Physical and Mathematical Science, Faculty of Science, UniversitiTunku Abdul Rahman, Kampar Campus, Kampar, Malaysia; Centre for Mathematical Sciences, Centre for Business and Management, UniversitiTunku Abdul Rahman, Kampar Campus, Kampar, Malaysia

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  • APA Style

    Lam Weng Siew, Liew Kah Fai, Lam Weng Hoe. (2017). An Empirical Investigation on the Efficiency of Healthcare Companies with Data Envelopment Analysis Model. Biomedical Statistics and Informatics, 1(1), 19-23. https://doi.org/10.11648/j.bsi.20160101.13

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    ACS Style

    Lam Weng Siew; Liew Kah Fai; Lam Weng Hoe. An Empirical Investigation on the Efficiency of Healthcare Companies with Data Envelopment Analysis Model. Biomed. Stat. Inform. 2017, 1(1), 19-23. doi: 10.11648/j.bsi.20160101.13

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    AMA Style

    Lam Weng Siew, Liew Kah Fai, Lam Weng Hoe. An Empirical Investigation on the Efficiency of Healthcare Companies with Data Envelopment Analysis Model. Biomed Stat Inform. 2017;1(1):19-23. doi: 10.11648/j.bsi.20160101.13

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  • @article{10.11648/j.bsi.20160101.13,
      author = {Lam Weng Siew and Liew Kah Fai and Lam Weng Hoe},
      title = {An Empirical Investigation on the Efficiency of Healthcare Companies with Data Envelopment Analysis Model},
      journal = {Biomedical Statistics and Informatics},
      volume = {1},
      number = {1},
      pages = {19-23},
      doi = {10.11648/j.bsi.20160101.13},
      url = {https://doi.org/10.11648/j.bsi.20160101.13},
      eprint = {https://download.sciencepg.com/pdf/10.11648.j.bsi.20160101.13},
      abstract = {Healthcare service quality plays an important role in today’s competitive environment. The people are very concern on their health status nowadays and willing to seek an affordable treatment from the healthcare companies. Besides affordable treatment, the people are also particular on the healthcare efficiency as the quality of the services and companies performance aresignificantly determined by the company’s efficiency. Data Envelopment Analysis (DEA) is a mathematical linear programming model which is utilized for measuring the efficiency of the companies as the ratio of the sum-weighted outputs to sum-weighted inputs. The objective of this study is to evaluate and compare the efficiency of the healthcare companies in Malaysia withDEA model. In this study, the data consists of 12healthcare companies that are listed in Malaysia stock market. The period of study is from year 2011 until 2015. The results of this study show thatAHEALTH, HAIO, IHH, PHARMA and YSPSAH are ranked as efficient healthcare companies. This study is significant because the DEA model helps to identify the efficient healthcare companies based on multiple inputs and outputs.},
     year = {2017}
    }
    

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    T1  - An Empirical Investigation on the Efficiency of Healthcare Companies with Data Envelopment Analysis Model
    AU  - Lam Weng Siew
    AU  - Liew Kah Fai
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    AB  - Healthcare service quality plays an important role in today’s competitive environment. The people are very concern on their health status nowadays and willing to seek an affordable treatment from the healthcare companies. Besides affordable treatment, the people are also particular on the healthcare efficiency as the quality of the services and companies performance aresignificantly determined by the company’s efficiency. Data Envelopment Analysis (DEA) is a mathematical linear programming model which is utilized for measuring the efficiency of the companies as the ratio of the sum-weighted outputs to sum-weighted inputs. The objective of this study is to evaluate and compare the efficiency of the healthcare companies in Malaysia withDEA model. In this study, the data consists of 12healthcare companies that are listed in Malaysia stock market. The period of study is from year 2011 until 2015. The results of this study show thatAHEALTH, HAIO, IHH, PHARMA and YSPSAH are ranked as efficient healthcare companies. This study is significant because the DEA model helps to identify the efficient healthcare companies based on multiple inputs and outputs.
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