A DEA-based performance measurement mathematical model and software application system applied to public hospitals in the Philippines

© 2016 by De La Salle University. Evaluation of performance is an important activity in identifying shortcomings in managerial efficiency and devising goals for improvement. However, measuring performance is not an easy task; more so in making sure that it captures a holistic view of performance. This study identified four existing performance measurement issues that organizations face often. These issues were (a) existence of missing data during data collection, (b) accounting undesirable or non-value adding outputs as opposed to desirable or marketable outputs, (c) inclusion of exogenous or environmental factors that affects the organization performance, and (d) arriving with resource allocation decisions that will help improve organizational performance. Linear Programming (LP) and Data Envelopment Analysis (DEA) were used to develop a performance measurement tool that addresses the aforementioned issues. Subsequently, this tool was used to develop the DEA-based performance measurement and reallocation software to aid managers in analyzing organizational performance. A case study on 14 NCR public hospitals was conducted to validate the logic and usefulness of the software. Software results showed that there were two inefficient hospitals and corresponding decisions to increase performance were identified in terms of inputs and outputs. An economic interpretation was then provided to realize the significance of the performance measurement results