Abstract
This paper combines the theory of teams and data envelopment analysis (DEA) to design a mechanism to optimally allocate resources in public healthcare. A statutory authority and the public hospitals under its governance are interpreted as a team, the members of which seek to operate efficiently under the shared institutional constraint that public healthcare is a public good. The individual public hospital exploits DEA to maximize own-payoff, subject to the team-condition that the payoff of each other public hospital does not fall and thereby subtract from the external effects created by the public supply of healthcare. The resulting team-DEA solution, which is shown to be both an individually-efficient and team-satisficing equilibrium and to be computable in terms of a convergent algorithm, can then be applied by the authority to determine the optimal allocation of resources in public healthcare. A case based on Chinese data is presented to illustrate the team-DEA model’s ready operationalization and computation.
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Acknowledgments
The authors are much indebted to Prof. Yeoh E K (Jockey Club School of Public Health and Primary Care, Chinese University of Hong Kong), Prof. Yam L Y C (Hong Kong Hospital authority and Jockey Club School of Public Health and Primary Care, Chinese University of Hong Kong), and Prof. Huang G Q (Department of Industrial and Manufacturing Systems Engineering, University of Hong Kong) for helpful comments.
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This paper was supported by a TRS Research Grant of the RGC, Hong Kong Government under Grant No. 8770001.
This paper was recommended for publication by Editor WANG Shouyang.
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Lai, K.K., Cheung, M.T. & Fu, Y. Resource Allocation in Public Healthcare: A Team-DEA Model. J Syst Sci Complex 31, 463–472 (2018). https://doi.org/10.1007/s11424-017-6124-6
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DOI: https://doi.org/10.1007/s11424-017-6124-6