Measuring economic performance of colorado community hospitals using the malmquist productivity change index

This study measures the productivity of 64 Colorado community hospitals by applying the DEA-based Malmquist productivity change index, decomposed into the technical efficiency change index and technical progressive change index. This study finds that the productivity of community hospitals in Colorado increased over the period 1993–2003, mainly as a result of technical progressive changes rather than technical efficiency improvement. The results suggest that to increase productivity, large community hospitals, rural hospitals, and nonprofit and public hospitals need to downsize their facilities, change their cost structure and facility operations, or adopt new management practices.