Efficiency of Jordanian public hospitals (2006–2015)

• Published date: 01 May 2022
• Author: Ahmad A. Alwaked,Usama R. Al‐qalawi,Sofyan Y. Azaizeh
• Date: 01 May 2022
• DOI: http://doi.org/10.1002/pa.2383

ACADEMIC PAPER

Efficiency of Jordanian public hospitals (2006–2015)

Ahmad A. Alwaked

1

| Usama R. Al-qalawi

2

| Sofyan Y. Azaizeh

3

1

Faculty of Economics and Administrative

Sciences, Department of Business & Financial

Economics, Yarmouk University, Irbid, Jordan

2

Faculty of Economics and Administrative

Sciences, Department of Economics, The

Hashemite University, Zarqa, Jordan

3

Department of Economics, Florida State

College at Jacksonvile, Jacksonvile, Florida

Correspondence

Ahmad A. Alwaked, Faculty of Economics and

Administrative Sciences, Department of

Business & Financial Economics, Yarmouk

University, PO Box 566, 21163 Irbid, Jordan.

Email: ahmad.waked@yu.edu.jo

Jordan is presently facing difficulties in providing adequate health care for its citizens

and the increasing number of refugees settled in the country. This study estimates

the efficiency of public hospitals in Jordan. It examines determinants of public hospi-

tals' efficiency in Jordan and how much is the average yearly efficiency for each hos-

pital during the study period, and how much is the average efficiency for different

groups of hospitals with diverse characteristics. Also, it estimates the changes in the

average yearly efficiency for all public hospitals. The results are obtained by per-

forming a production stochastic frontier analysis on the Jordanian public hospitals

data set. The empirical results for a panel of 29 hospitals during the period

2006–2015 indicates that the efficiency of public hospitals in Jordan fluctuates

widely among hospitals with a range between 94.43 and 11.72% and an average that

equal to 54.67%. However, the average yearly efficiency for all public hospitals did

not change during the study period.

JEL CLASSIFICATION

H11; L1; I11; I12; L25

1|INTRODUCTION

Jordanian public hospitals have faced significant challenges in the past

two decades because of several factors. These factors include the

high population growth rate, forced migration, limited government

revenue, and a continuous increase in the cost of health care

(Rawabdeh & Khassawneh, 2018). These challenges forced public hos-

pitals to adopt efficient production methods. In this article, we investi-

gate if the public hospitals in Jordan changed their production

efficiency during the period of study or not.

During the period of study, Jordan has faced rapid population

growth. In 2006, the Jordanian Department of Statistics projected the

Jordanian population would reach 5.9 million, this figure increased in

2015 to reach 9.6 million. Statistics also indicate that Jordan has

recently seen a high annual population growth rate of 5.6% during

the period of 2006–2016, much of which can be attributed to forced

migration as a result of the 2003 invasion of Iraq, and the 2011 Syrian

civil war. This resulted in a non-Jordanian population of nearly 3 mil-

lion people, which represents around 31% of the total population

(Jordan Statistics Yearbook, 2018). And according to the Jordanian

Ministry of Health (MoH) and the World Health Organization, Syrian

refugees account for 7% of the Jordan population as in 2013. Besides,

the number of Syrian refugees who benefit from public hospitals has

increased by almost 250% in the first 5 months of that year (Healy &

Tiller, 2013). This increased the pressure on the government to

reallocate the available resources toward the most affected public

hospitals.

The Jordanian government suffers from limited financial

resources while facing increasing demand for health care services,

which require the public hospitals to be as efficient as possible.

According to the MoH, the health care expenditures were 237.2 mil-

lion Jordanian Dinar (hereafter JD) in 2006, which was about 6.13%

of the government expenditure in that year. The share of public health

care expenditure increase to reach 8.15% of the total government

budget in 2016. During the period 2006–2015, the health care expen-

diture growth rate was 13.1% (annual average). The above-mentioned

facts show that the Jordanian public hospitals are struggling to supply

high-quality health care services at a lower cost.

These challenges were discussed in many previous studies. Moss-

ialos, Mrazek, and Walley (2004) affirmed that governments are facing

a trade-off between conflicting policies and objectives, they are trying

to regulate health care by providing patients a safe and effective med-

ical care, while at the same time imposing cost control policies. Simi-

larly, Yitbarek et al. (2019) studied the technical efficiency of health

Received: 29 October 2019 Revised: 29 July 2020 Accepted: 8 August 2020

DOI: 10.1002/pa.2383

J Public Affairs. 2022;22:e2383. wileyonlinelibrary.com/journal/pa © 2020 John Wiley & Sons Ltd 1of13

https://doi.org/10.1002/pa.2383