Evaluating Colombian public hospitals productivity during 2004-2015. A Luenberger-Indicator approach

Background: In Colombia, public policy has encouraged hospital efficiency and sustainability since 1993, when its health system underwent a profound change with the Law 100. Method: We estimate the efficiency and productivity of Colombian public hospitals using the Luenberger productivity indicator. This less restrictive indicator allows for a disaggregated regional analysis and does not overestimate the change in productivity when compared to other measures. It was made an empirical application to a sample of 260 hospitals during the 2004-2015 period. Results: The results show a productivity decline for Colombian public hospitals, explained mainly by the decrease in technological change as a result of low investment in technology. In fact, one out of every eighty-seven hospitals reached an improvement in efficiency and technological change simultaneously, while, one out of every two experienced the opposite. On average, hospitals in all regions showed a productivity decrease, in particular those in the Eastern region, an area that accounted, with the Central region, three-fifths of the overall decline. Discussion and conclusion: The efficiency and productivity that was sought to be achieved through the profound change in the health system were insufficient. Thus, governmental measures should: encourage managers to modernize their administrative and organizational factors, promote the development of technology and research in health by greater investments, and foster complementary and non-competitive relationships among hospitals.