Efficiency of hospitals in Germany: a DEA-bootstrap approach

Various attempts to assess the performance of German hospitals have generated a wide range of estimates regarding their efficiency. These attempts were based on different, often rather small data sets consisting of heterogeneous hospitals; the techniques applied range from simple benchmarking approaches to studies which employ Data Envelopment Analysis (DEA). Some studies report ‘dramatic differences in efficiency’ and propose savings potentials of 50%; others find an average efficiency in excess of 95% and characterize almost 75% of their observations as fully efficient. This study presents results for two datasets representative of two segments of the German hospital system. These segments comprise all hospitals that have one internal medicine and one surgery department; the hospitals are located in the old federal states of Germany. None of the hospitals provides tertiary care. DEA can be applied because all hospitals offer a comparable quality and range of services. The results were estimated with a DEA-bootstrapping procedure and suggest an average bias–corrected efficiency of around 80%.