Track: Operations Management

Abstract

While there already exists tools that can be implemented to improve inefficiency. The problem lies in determining where the inefficiencies reside. The contribution this paper provides includes demonstrating an outline to create a composite index for the purpose of determining inefficiencies.  This objective leads to the numerical presentation of a composite index which will quantify the healthcare industry’s inefficiencies. The healthcare industry has benefitted from operational efficiency improvements, both in medicine and administration. The outputs of this index will provide healthcare administration a means of justifying internal and external decisions made for specified operational improvements. The Analytical Hierarchy Process and the Data Envelopment Analysis are the methodologies incorporated in the composite index. The index integrates sub-indices that are aggregated and weighted to determine the overall efficiency of a hospital. The index is applied using real data from ten Canadian hospitals which has been provided by the Canadian Institute for Health Information (CIHI). The index demonstrates the level of efficiency for each composition of the index and the overall efficiency of a hospital can be standardized to the efficiency of all hospitals using this system.