Oper Res Int J (2012) 12:6981

DOI 10.1007/s12351-010-0080-4

ORIGINAL PAPER

Productivity and quality changes in Greek public

hospitals

Roxani Karagiannis Kostas Velentzas

Received: 16 September 2009 / Revised: 12 May 2010 / Accepted: 14 May 2010 /

Published online: 1 June 2010
Springer-Verlag 2010

Abstract The objective of this paper is to estimate productivity changes after the
inclusion of quality variables for a panel of Greek public hospitals during the period
20022007. We measure hospital productivity and quality changes through a non-
parametric estimation of the quality adjusted Malmquist productivity index by using
the percentage of survival after admissions as a proxy of hospital care services
quality. Even though the empirical results indicate on average deterioration both in
productivity and quality there is considerable variation among the sample hospitals.

Keywords Productivity  Efficiency  Quality  DEA  Hospitals 

Greece

JEL Classification D24  I10

1 Introduction

Quantity and quality are two aspects in the provision of services to which decision
makers devote resources and when resources are limited an inevitable trade-off exist
between them. That is, increased quality may require additional resources, while a
tendency towards efficiency improvements and cost containment can lead to poorer

R. Karagiannis
Centre for Planning and Economic Research (KEPE),
11 Amerikis str., 10672 Athens, Greece

K. Velentzas
Department of Economic Studies, University of Macedonia,
156 Egnatia str., 54006 Thessaloniki, Greece

R. Karagiannis (&)
72 Evzonon str., 57010, Asvestohori, Thessaloniki, Greece
e-mail: roxani@uom.gr; rkarag@kepe.gr

123
70 R. Karagiannis, K. Velentzas

services quality. Nevertheless we cannot rule out at the outset the possibility of
higher quality along with better economic performance and lower production costs,
i.e. achieving higher efficiency. If such a relation between quality and costs or
(output) exists, it has then serious policy implications. In health management,
particularly, the relation between the quality of care and economic performance is a
crucial aspect in the production of health services, because it is usually assumed that
low cost and high quality are conflicting objectives.
It is in general true that quality is a multidimensional aspect of health care which
is neither easy to be defined nor to be measured. It is related to maximising patient
satisfaction, while taking into consideration the benefits and the damages associated
with a particular care process. Three components of health care quality are
distinguished in the literature: the technical aspect of quality, the interpersonal
aspect of quality and the amenities of care. From these, the former has been used in
performance evaluation studies. The technical aspect of quality refers to how well
medical science and knowledge are applied to the diagnosis and treatment of a
medical problem (Donabedian 1980). Several variables have been used to
approximate the technical quality of hospital treatment: namely, nosocomial
infections (Sola and Prior 2001; Prior 2006), patients readmissions (Arocena and
Garcia-Prado 2007), survivals after admission (Maniadakis et al. 1999) and risk-
adjusted patient safety indicators (Valdmanis et al. 2008).
The majority of health management studies estimating efficiency or productivity
do not deal with quality issues. There are few exceptions but the empirical results of
these studies are rather mixed: Maniadakis et al. (1999) and Sola and Prior (2001)
found, for UK and Spain respectively, that the quality of hospital services and
productivity changes have followed different patterns over time as productivity
gains were associated with quality deterioration. In contrast, Arocena and Garcia-
Prado (2007) found that improvements in hospital efficiency were associated with
improvements in service quality and Laine et al. (2005) pointed that a relation exists
between technical efficiency and unwanted dimensions of quality. On the other hand
and to the best of our knowledge, no previous study on the performance of Greek
health care system has dealt with quality issues in either efficiency or productivity
measurement.1
The main objective of this paper is to provide such empirical evidence using a
sample of rural public hospitals in Greece during the period 20022007. By
focusing on the technical dimension of health care quality, we use Fare et al. (1995)
formulation to examine the impact of quality in productivity changes. In particular,
we use the percentage of survival after admissions as a proxy of services quality,
along with the relevant inputs and outputs, to measure hospital productivity through
a non-parametric estimation of the quality adjusted Malmquist productivity index.
In addition, we provide empirical results regarding the decomposition of the quality
adjusted Malmquist productivity index into its components, namely, technical
efficiency change, technological change, scale efficiency change as well as a quality
1
All previous studies on Greek health care efficiency (i.e., Athanassopoulos et al. 1999; Athanassopoulos
and Gounaris 2001; Giokas 2001; Aletras et al. 2007; Karagiannis and Hatziprokopiou 2008; Karagiannis
and Velentzas 2009) and productivity (i.e., Maniadakis and Thanassoulis 2004) measurement did not
account for quality changes.

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Productivity and quality changes in Greek public hospitals 71

effect. In that respect we are able to examine in details the relationship between
changes in quality and productivity for all public hospital included in the sample.
The empirical results indicate that on average productivity declines have been
associated with a decrease in services quality. Even though the impact of quality on
productivity changes was small during the period under consideration, we have
observed different patterns across the sample hospitals. In particular, the majority of
hospitals exhibited deterioration both in productivity and the quality of provided
services but we also found a hospital, which improved both productivity and quality.
The rest of this paper is organized as follows: in the next section we present the
empirical model that is based on the quality adjusted Malmquist productivity index
and its relation to the conventional Malmquist productivity. In the third section we
discuss the data and the estimation technique. The empirical results are reported in
the forth section and concluding comments follow in the last section.

2 Empirical model

The Malmquist productivity index is nowadays the most widely used tool in
dynamic performance evaluation. For the purposes of the present study, we
employed its output-oriented version, as it is more reasonable to assume that the
inputs (e.g., number of beds, number of doctors, number of nursing and other
personnel) rather than the outputs (e.g., patient admissions) are under the control of
hospital managers and decision makers. Then, the geometric mean of an output-
oriented Malmquist productivity index is defined as (Fare et al. 1994):
 t t1 t1 t1 t1 t1 1=2
Doc x ; y Doc x ; y
Mo 1
Dtoc xt ; yt Dt1 t t
oc x ; y

where the subscript o is used to denote the orientation, the subscript c the constant-
returns-to-scale (CRS) technology, x 2 Rn refers to inputs, y 2 Rm to outputs and
Dto xt ; yt minfh [ 0 : yt =h; xt 2 Pt xt g is the output distance function defined
h
with respect to the output set Pt(xt). The output distance function provides a natural
measure of output-oriented technical efficiency (/) as / = [Dtoc(xt, yt)]-1. Notice
that any well behaving Malmquist productivity index such as in (1) should be
defined with respect to the CRS technology (Fare and Grosskopf 1996, p. 54). A
value of Mo greater (less) than one indicates productivity progress (regress) while a
value equal to one indicates that productivity remains unchanged.
According to Fare et al. (1994), the Malmquist productivity index in (1) could be
decomposed as:
 t1 t1 t1   t t t t1 t1 t1 
Dov x ; y D x ; y Doc x ; y
Mo t t t
 ov
Dov x ; y Dtoc xt ; yt Dt1
ov x
t1 ; yt1
 t t1 t1  1=2
Doc x ; y Dtoc xt ; yt
 t1 2
Doc xt1 ; yt1 Dt1 t t
oc x ; y

123
72 R. Karagiannis, K. Velentzas

where subscript v denotes variable-returns-to-scale (VRS). The first term in right

hand side of (2) is an index of pure technical efficiency change, indicating a
movement towards or away from the VRS frontier. The second term is an index of
scale efficiency change indicating a movement towards or away from the most
productive scale size (MPSS), as defined by Banker (1984). The third term measures
technical change, i.e. shifts of the best practice frontier between the periods t and
t ? 1.
The Malmquist productivity indices in (1) and (2) measure productivity changes
by taking into account outputs and inputs. To consider the role of quality in
productivity changes we have to distinguish between two aspects of hospital
services: the quantitative (yt) (e.g. number of patients admissions,  number  of
patients days, etc.) and the qualitatively, often referred as attributes at 2 RS (e.g.
number of nosocomial infections, number of deaths, number of patients readmis-
sions, etc.). Then, output distance function is redefined as:
Dto xt ; yt ; at minfh [ 0 : yt =h; xt ; at 2 Pt xt g 3
h

Similar for Dt?1

o (x
t?1
, yt?1, at?1). Furthermore, we need to consider the mixed
period cases, namely:
     
Dto xt ; yt ; at1 min h [ 0 : yt =h; xt ; at1 2 Pt xt 4
h

and
 t1 t1 t      
Dt1
o x ; y ; a min h [ 0 : yt1 =h; xt1 ; at 2 Pt1 xt1 5
h

Based on these Fare et al. (1995) defined the quality adjusted Malmquist produc-
tivity index (MQo) as:
 t1 t1 t1 t1   t t t t t1 t1 t1 t1 
Dov x ; y ; a D x ; y ; a Doc x ; y ; a
MQo  ov
Dtov xt ; yt ; at Dtoc xt ; yt ; at Dt1
ov x
t1 ; yt1 ; at1

 t t1 t1 t1  1=2
Doc x ; y ; a Dtoc xt ; yt ; at
 t1 6
Doc xt1 ; yt1 ; at1 Dt1 t t t
oc x ; y ; a

which equals the reciprocal of the index originally introduced by Fixler and Zie-
schang (1992). On the other hand, the quality change index, which provides a direct
measure of changes in attributes over time, is defined as:
 1=2
  Dtoc xt ; yt ; at Dt1
oc x
t1 t1 t
;y ;a
Qo xt1 ; yt1 ; at1 ; xt ; yt ; at 7
Dtoc xt ; yt ; at1 Dt1
oc x
t1 ; yt1 ; at1

If we assume that the technology exhibits strong disposability of outputs and

attributes then Dto(xt, yt, at?1) C Dto(xt, yt, at) for at?1 C at and Dt?1
o (x
t?1
, yt?1,
t?1 t?1 t?1 t?1 t
a ) C Do (x , y , a ). In this case, Qo \ 1 indicating progress. If however
at?1 = at, then Qo = 1.
Fare et al. (1995) provided an alternative decomposition of (6) by assuming that
the distance function is multiplicatively separable in attributes and outputs and

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Productivity and quality changes in Greek public hospitals 73

inputs, i.e. Dtoc xt ; yt ; at1 D^toc xt ; yt =At at1 . In this case, the Malmquist
quality productivity index (6) could be written as:
 t1 t1 t1 
1 D x ; y
MQo t1 t1 t1 t t t
 ov t t t
Qo x ; y ; a ; x ; y ; a Dov x ; y
 t t t t1 t1 t1   t t1 t1 1=2
D x ; y Doc x ; y Doc x ; y Dtoc xt ; yt 1
 ov t t t t1 t1 t1
 t1 t1 t1 t1 t t
 Mo
Doc x ; y Dov x ; y Doc x ; y Doc x ; y Qo
8
Thus the quality adjusted Malmquist productivity index equals the components of
the conventional Malmquist productivity index in (2) multiplied by the reciprocal of
quality change index Qo.

3 Estimation and data

We implement the above empirical model in two stages by estimating the

conventional (model A) and the quality adjusted (model B) Malmquist productivity
indices, and through them we compute the quality change index. We proceed by
estimating the various distance functions involving in (2) and (6). For this purpose
we use the non-parametric technique known as Data Envelopment Analysis (DEA)
and the DEAP software package developed by Coelli (1996).2 The basic form of the
corresponding linear programming problems is as follows:
 t t t 1
Doc x ; y max /
PK
s:t: xtn  zk xtk  0; n 1; . . .; N
k1 9
t
P
K
t
/ym zk yk  0; m 1; . . .; M;
k1
zk  0; k 1; . . .; K
where z is the activity vector used to construct the linear segments of the frontier.
The rest of linear programming problems needed for the estimation of conventional
and the quality adjusted Malmquist productivity indices are given in the Appendix.
This way we estimate the productivity changes as well as the separate components
referring to different sources of growth.
The empirical results are based on data provided by a rural Regional Health
Administration Office (DYPE) in Greece (not identified here for obvious reasons)
for the period 20022007. These data refer in total to eight hospitals.3 The data was
collected through questionnaires completed by the administrative services of each

2
DEA as any other method has advantages and disadvantages. For a detailed discussion of these see for
example the first chapter in Fried et al. (2008).
3
Despite the small sample size, our formulation satisfies Dyson et al. (2001) rule of thumb, which
suggests that the number of DMUs should be greater than or equal to the double of the product between
the number of inputs and the number of outputs. Otherwise, a great number of DMUs would artificially
appear as efficient.

123
74 R. Karagiannis, K. Velentzas

hospital.4 As output (yti) we use the number of inpatient days and as inputs (xti) the
number of beds, the number of doctors, and the number of nursing and other
personnel.5 Since for the purposes of the present paper we focus on the technical
aspects of health care quality, we employ a variable previously used in the literature
(e.g., Maniadakis et al. 1999) to approximate attributes (ati) of hospital services,
namely the percentage of survivals after admissions.6 At this stage we were unable
to collect data on any other variable that can be used for this purpose. A high
survival rate reflects the efficient impact of the diagnosis and the treatment
processes. Thus high survival rates are positively related with both the effectiveness
of a given treatment, since the patients did not developed complications that might
result in death, and consumer satisfaction, as patient wish of recuperation was
achieved.
The mean values of the considered variables are reported in Table 1. Over the
period under consideration, the number of inpatient days increased by an average
annual rate of 11.6%. On the other hand, the percentage of survivals after admission
increased only slightly but it has a greater variability among the sample hospitals.
The number of beds increased by an average annual rate of 8.6% but this was not
however uniform across hospitals as the capacity of medium and large size units
increased while that of small ones decreased.7 On average, the number of doctors
increased by an average annual rate of 3.9% and the number of nursing and other
personnel by 2.8%.

4 Empirical results

Before we proceed to the analysis of dynamic performance evaluation using the two
Malmquist productivity indices, we provide a short discussion of efficiency scores
using the CRS technology as a benchmark.8 Figure 1 presents the mean technical
efficiency scores in the cases of excluding (Model A) and including (Model B) the
quality variable. Averaging over hospitals and time, technical efficiency scores for

4
Hospitals constitute the core of the Greek National Health System. They are governed by the Chairman
of the Regional Health Administration Office and are managed by the Manager and the Board of
Directors.
5
We avoid including operational expenses as in input due to data inaccuracy. Since a large part of
operational expenses consists of pharmaceuticals, there is the following peculiarity: the reported expenses
as end-of-the year book values refer to that year outlays for pharmaceuticals even tough some of them
have been used in previous years. This may be happen because either they were not paid in time or there
was an agreement to be paid in parts. Since these details are not included in the data, it is impossible to
figure out the actual annual pharmaceutical expenses from these end-of-the-year book values.
6
Since this is the only variable used in ratio form it means that we do not impose any a priori CRS
structure in the data and consequently in the implemented model. This concerns mentioned in Jacobs et al.
(2006), p. 104 arises naturally when all variables are in ratio form, with a common denominator. For this
reason we can use without problems a CRS formulation (9), as required by the proper definition of the
conventional and the quality adjusted Malmquist productivity indices.
7
As small hospitals are defined these with less than 100 beds, as medium these with 100300 beds, and
as large these with more than 300 beds.
8
The corresponding VRS estimates, not reported here, are as expected no less than CRS estimates.

123
Productivity and quality changes in Greek public hospitals 75

Table 1 Mean values of outputs, inputs and attributes, Greek public hospitals, 20022007
Number of Percentage of survival Number Number Number of nursing
inpatient days patients after admissions of beds of doctors and other personnel

2002 48,927 98.34 190 150 496

2003 52,555 98.20 193 158 507
2004 49,933 98.18 196 170 533
2005 54,311 98.07 205 170 529
2006 74,618 98.34 274 188 530
2007 77,630 98.40 272 185 566

Technical efficiecny scores under CRS

1.000 Model A Model B

0.900
0.800
efficiency scores

0.700
Technical

0.600
0.500
0.400
0.300
0.200
0.100
2002 2003 2004 2005 2006 2007
Year

Fig. 1 Technical efficiency scores of public hospitals in Greece, 20022007

Model A were found to be 77.60%. The inclusion of the quality variable has, on
average, increased the level of technical efficiency up to 88.90%. As a result, Model
A (Model B) predicts that the sample hospitals could have increased their output by
22.40% (11.10%), if they had explored all the possibilities available by the current
technology.
Frequency distribution of mean technical efficiency is given in Fig. 2. According
to Model A, the vast majority of hospitals (62.5%) exhibited technical efficiency
scores between 60 and 90%. Model B, which predicts higher technical efficiency
scores, shows that 75% of hospitals fall in the range of 80100%. It seems that the
inclusion of attributes eliminates the low tail of the technical efficiency score
distribution: in Model B there are no hospitals with technical efficiency scores less
than 70%. Thus, the inclusion of attributes increases the mean technical efficiency
and decreases the variance of the efficiency scores. Nevertheless both models
predict a slight decline in technical efficiency in the second half of the period under
consideration.
The empirical results of productivity analysis are reported in Tables 2 and 3. In
the former table we present the trends over the period under consideration. On

123
76 R. Karagiannis, K. Velentzas

Model A
40
35
30
% of hospitals 25
20
15
10
5
0
<50 50-60 60-70 70-80 80-90 90-100 100
technical efficiency score intervals
2002 2003 2004 2005 2006 2007

Model B
50
45
40
% of hospitals

35
30
25
20
15
10
5
0
<50 50-60 60-70 70-80 80-90 90-100 100
technical efficiency scores inteval
2002 2003 2004 2005 2006 2007

Fig. 2 Frequency distribution of mean technical efficiency of public hospitals, 20022007

average, both models predict a deterioration (of different magnitude) of produc-

tivity. According to the conventional Malmquist productivity index, productivity
decreased with an average annual rate of 1.2% during the period 20022007 while
according to the quality adjusted Malmquist productivity index it decreased with an
even greater average annual rate (1.4%). This was not however a uniform trend as
productivity decreased during the period 20032006 but increased in the beginning
and at the end of the period under consideration.
Both models also predict exactly the same sources of productivity deterioration:
on average, this was due to technical regress and decreases in efficiency. The
average annual rate of technical change was estimated at -0.4% (Model A) and
-0.3% (Model B) and that of technical efficiency change at -0.9% (Model A) and
-1.2% (Model B). A periodic path can be found in the temporal pattern of both
sources of growth. That is, with the exception of 20032004 and 20052006, the
production frontier model moved outwards because of technical change while, with
the exception of 20032004 and 20062007, hospitals moved away from the
production frontier deteriorating their efficiency scores. On the other hand, the two
models provide different explanations for the changes in technical efficiency. Model
A indicates that, on average, scale efficiency has been improved over time while
pure technical efficiency has been deteriorated, with the later being stronger in

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Productivity and quality changes in Greek public hospitals 77

Table 2 Geometric mean of Malmquist and Quality productivity index and its decomposition for Greek
public hospitals, 20022007
20022003 20032004 20042005 20052006 20062007 20022007

Model A
Efficiency change 0.967 1.074 0.942 0.945 1.036 0.991
Pure technical efficiency 0.991 1.005 0.969 0.975 0.996 0.987
change
Scale efficiency change 0.976 1.069 0.972 0.970 1.040 1.004
Technical change 1.067 0.898 1.031 0.985 1.008 0.996
Malmquist Productivity 1.032 0.965 0.971 0.931 1.044 0.988
index (Mo)
Model B
Efficiency change 0.979 1.014 0.974 0.985 0.989 0.988
Pure technical efficiency 1.001 1.000 1.000 1.000 0.998 1.000
change
Scale efficiency change 0.977 1.014 0.975 0.986 0.991 0.988
Technical change 1.076 0.919 1.013 0.952 1.038 0.997
Malmquist productivity 1.053 0.932 0.984 0.938 1.026 0.986
index (MQo)
Quality change 0.980 1.035 0.987 0.993 1.018 1.002
index (Qo)

Table 3 Geometric mean of Malmquist and Quality productivity index and its decomposition over
Greek public hospitals, 20022007
Hospital 1 2 3 4 5 6 7 8

Model A
Efficiency change 1.019 0.981 0.962 1.015 0.938 1.018 1.000 1.000
Pure technical efficiency change 1.019 0.977 0.958 1.000 0.934 1.010 1.000 1.000
Scale efficiency change 1.000 1.003 1.004 1.015 1.005 1.008 1.000 1.000
Technical change 1.005 1.005 1.005 1.005 1.005 0.971 0.976 1.001
Malmquist productivity index (Mo) 1.024 0.986 0.966 1.020 0.943 0.989 0.976 1.001
Model B
Efficiency change 1.019 0.978 0.964 1.000 0.943 1.004 1.000 1.000
Pure technical efficiency change 1.000 0.999 0.999 1.000 0.999 1.001 1.000 1.000
Scale efficiency change 1.019 0.979 0.965 1.000 0.944 1.003 1.000 1.000
Technical change 1.004 1.000 1.000 1.025 1.010 0.966 0.974 1.001
Malmquist productivity index (MQo) 1.023 0.978 0.964 1.025 0.952 0.969 0.974 1.001
Quality change (Qo) 1.001 1.008 1.002 0.995 0.991 1.021 1.002 1.000

quantitative terms. In contrast, Model B indicates that pure technical efficiency has
been unchanged, whereas scale efficiency has been deteriorated resulting in a
decrease of overall efficiency.
In addition, the effect of quality changes on productivity was on average
negative; that is, the decreases in services quality have resulted in productivity

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78 R. Karagiannis, K. Velentzas

deterioration. In particular, quality changes reduced productivity by an average

annual rate 0.2%, which is the difference between the rates of growth of the
conventional and the quality adjusted Malmquist productivity indices. However this
was not uniform during the period under consideration: the quality index has
increased during the period 20022003, decreased in 20032004, increased in
20042006, and decreased thereafter. Nevertheless the contribution of quality
changes to productivity was relatively small because on average there was no large
variation in the percentage of survival over time.
There is, however, much more variation in the results across hospitals. As it can
be seen from Table 3 we have one hospital with improvements both in quality and
productivity, four hospitals with deteriorations both in quality and productivity, two
hospitals where increases in productivity were associated with non-improvements in
quality, and one hospital where decreases in productivity were associated with
improvements in quality. These cases are discussed next.
Hospitals #1 and #4 achieved the highest productivity growth (2.5 and 2.0%,
according to Model A and 2.4 and 2.5% according to Model B). The main source of
productivity increases for hospital #1 was pure technical efficiency change. On the
other hand, the rate of technical change was relatively slow (0.5%). However,
despite the improvement in productivity, quality deteriorated slightly (0.1%).
Hospital #1 is a relatively large unit (see footnote 6 for the classification scheme
adopted), which experienced an increase in the number of inpatient days, in the
number of beds and in the number of doctors. The mean length of stay in this
hospital was 4 days and the bed occupancy rate was 69%, with empty bed interval
of 1.64 days. On the other hand, for hospital #4, scale efficiency changes were the
main source of efficiency changes. This hospital improved its quality of services
much more than hospital #1. Hospital #4 is a relatively small unit, which
experienced a decrease in the number of inpatient days and an increase in the
number of doctors. The mean length of stay was equal to 4 days and the bed
occupancy rate was 41%, with empty bed interval equal to 6 days.
On the other side, hospital #5 exhibited the largest productivity deterioration
(5.7% according to Model A and 4.8% according to Model B). In this case, the two
models predict quite different sources of change. According to Model A, the main
source of productivity regress was efficiency decreases and more specifically, pure
technical efficiency changes (6.6%), while according to Model B productivity
regress is due mainly to scale efficiency changes. Technical change results in a 1%
improve in productivity. This hospital with the largest productivity deterioration had
the largest improvement in the quality of health services. It is a relatively small
hospital and experienced a substantial decrease in the number of inpatient days
while the number of doctors and beds had remained unchanged during the period
under consideration. The mean length of stay was 4 days and the bed occupancy
rate was 56%, with empty bed interval equal to 3 days.
Hospital #6 exhibited the highest deterioration in quality and at the same time
productivity deterioration. It is a relatively large unit that experienced increases in
the number of inpatient days, in the number of doctors and in the number of nursing
and other personnel, while the number of beds was declined. The mean length of

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Productivity and quality changes in Greek public hospitals 79

stay in this hospital was 4 days and the bed occupancy rate was 60%, with empty
bed interval equal to 3 days.
Finally, hospitals #8 had a stable quality index (i.e. the quality index was equal to
one) and achieved productivity increases in an average annual rate of 0.1%, which
was mainly due to technical change, as technical efficiency was unchanged. This is
a relatively large hospital that experienced increases in the number of inpatient days,
in the number of beds and in the number of doctors. The mean length of stay in this
hospital was 3 days and the bed occupancy rate was 85%, with empty bed interval
equal to 0.63 days.

5 Conclusions

The aim of this paper is to provide empirical evidence on the relationship

between quality and productivity changes in Greek public hospitals. For this
purpose we estimate the quality adjusted Malmquist productivity index for a
panel of rural hospitals in Greece during the period 20022007. The empirical
results indicate that on average productivity declines have been associated with a
decrease in services quality. The recovery of productivity in the last part of the
period under consideration may suggest however that the introduction of 2005
Health Reform produced a disruption in the health care sector and a temporary
worsening in productivity, which it was possible to regain in the subsequent
years.
Even though the impact of quality on productivity changes was small during the
period under consideration mainly due to its slight variation, we have observed
different patterns across the sample hospitals. In particular, we have found one case
with improvements both in quality and productivity, four cases with deteriorations
both in quality and productivity, two cases where increases in productivity were
associated with non-improvements in quality, and one case where decreases in
productivity were associated with improvements in quality.
A word of caution is in order before closing as the results may be depending on
the variable used to approximate the technical aspect of health care services. At
this stage we are unable to examine this question because data on other quality-of-
health-services variables are not (to the best of our knowledge) available. Further
research is however required to analyze the impact of other quality attributes such
as patients readmissions or nosocomial infections on hospital quality, but
additional data are required for such an attempt. The analysis could also be
extended to include a larger number of hospitals in different areas and other
important variables such as outpatient visits or the number of surgeries or hospital
expenditures.

Acknowledgments Pythagoras II-Funding of research groups in the University of Macedonia, Priority

Action 2.2.3.e, Measure 2.2, to be implemented within the framework of the Operational Programme
Education and Initial Vocational Training II (EPEAEK II) and co-financed by the European Union [3rd
Community Support Framework, 75% financed by the European Social Fund 25% National Resources].

123
80 R. Karagiannis, K. Velentzas

Appendix: Linear programming problems

 t t1 t1 1
Doc x ; y max /
P
K
s:t: xt1
n  zk xtk  0; n 1; . . .; N
k1 10
PK
/yt1
m zk ytk  0; m 1; . . .; M;
k1
zk  0; k 1; . . .; K
 t t 1

Dt1
oc x ; y max /
P
K
s:t: xtn  zk xt1
k  0; n 1; . . .; N
k1 11
PK
/ytm zk yt1
k  0; m 1; . . .; M;
k1
zk  0; k 1; . . .; K
 t t t t 1
Doc x ; y ; a max /
PK
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