Comparison of Hospitals in Jakarta as Decision-Making Unit for Technical Efficiency and Cost Values: Application of DEA and SFA

Abstract

The implementation of national health insurance in Indonesia in 2014 as an effort to provide universal health care was known as
the BPJS program. It was named after the responsible agency: Badan Penyelenggara Jaminan Sosial (Health Social Security Administrator). In its early years of implementation, it was indicated that it was not financially optimal because it made a significant financial loss. Therefore, this research was conducted to examine the efficiency level of several hospitals in Jakarta from a technical and cost perspective. The 2018 data was obtained from the Ministry of Health and BPJS. The survey covered 36 hospitals from various regions in Jakarta and was analyzed using Data Envelopment Analysis and Stochastic Frontier Analysis. DEA Solver LV 8 and Frontier 4.1 were the primary tools in this study. There were two significant results of this study. First, most hospitals in Jakarta were efficient in terms of technical efficiency score of DEA (0.73) and SFA (0.52), whereas cost efficiency was mediocre with a score of DEA (0.56) and SFA (0.50). Second, three indices (regional technical efficiency score, regional cost efficiency score, and ownership cost efficiency score) showed similar patterns for DEA and SFA efficiency scores except for the ownership technical efficiency index. It is recommended that the government should immediately improve the centralized national database for hospitals and decide strategic policy to arrange for cooperation between hospitals primarily by sharing their data on hospitals’ load and staff availability.