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Persistent Cost Efficiency at Public Community Colleges in the US: A Stochastic Frontier Analysis

ABSTRACT: This study utilizes an extensive panel data set spanning 15 years (2004–2018) and 752 public community colleges to investigate operating costs and persistent cost efficiency at public community colleges in the United States. We employ a generalized true random effects (GTRE) regression model that takes into account spatial correlation of costs among community colleges, to estimate cost efficiency via stochastic frontier analysis (SFA). The results reveal a positive relationship between operating costs and associate degrees and certificates as well both human (part- and full-time faculty) and financial resources (local, state and federal funding and tuition revenue), controlling for other variables. Furthermore, with an average persistent (long-term) efficiency of 87%, few institutions are relatively cost inefficient. Moving forward, campus leaders and policy makers alike may consider yearly data and efficiency calculations to develop strategic plans and funding alternatives. With 40 percent of first-time students transferring at least once within six years and over half of those students transfer from a community college, future research may study cost efficiency of community colleges while accounting for student transfers as an output.

Supplementary Information

The online version contains supplementary material available at 10.1007/s11162-021-09634-y.

SUBMITTER: Titus M

PROVIDER: S-EPMC8032850 | biostudies-literature |

REPOSITORIES: biostudies-literature

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Project description:BACKGROUND:Eritrean gross national income of Int$610 per capita is lower than the average for Africa (Int$1620) and considerably lower than the global average (Int$6977). It is therefore imperative that the country's resources, including those specifically allocated to the health sector, are put to optimal use. The objectives of this study were (a) to estimate the relative technical and scale efficiency of public secondary level community hospitals in Eritrea, based on data generated in 2007, (b) to estimate the magnitudes of output increases and/or input reductions that would have been required to make relatively inefficient hospitals more efficient, and (c) to estimate using Tobit regression analysis the impact of institutional and contextual/environmental variables on hospital inefficiencies. METHODS:A two-stage Data Envelopment Analysis (DEA) method is used to estimate efficiency of hospitals and to explain the inefficiencies. In the first stage, the efficient frontier and the hospital-level efficiency scores are first estimated using DEA. In the second stage, the estimated DEA efficiency scores are regressed on some institutional and contextual/environmental variables using a Tobit model. In 2007 there were a total of 20 secondary public community hospitals in Eritrea, nineteen of which generated data that could be included in the study. The input and output data were obtained from the Ministry of Health (MOH) annual health service activity report of 2007. Since our study employs data that are five years old, the results are not meant to uncritically inform current decision-making processes, but rather to illustrate the potential value of such efficiency analyses. RESULTS:The key findings were as follows: (i) the average constant returns to scale technical efficiency score was 90.3%; (ii) the average variable returns to scale technical efficiency score was 96.9%; and (iii) the average scale efficiency score was 93.3%. In 2007, the inefficient hospitals could have become more efficient by either increasing their outputs by 20,611 outpatient visits and 1,806 hospital discharges, or by transferring the excess 2.478 doctors (2.85%), 9.914 nurses and midwives (0.98%), 9.774 laboratory technicians (9.68%), and 195 beds (10.42%) to primary care facilities such as health centres, health stations, and maternal and child health clinics. In the Tobit regression analysis, the coefficient for OPDIPD (outpatient visits as a proportion of inpatient days) had a negative sign, and was statistically significant; and the coefficient for ALOS (average length of stay) had a positive sign, and was statistically significant at 5% level of significance. CONCLUSIONS:The findings from the first-stage analysis imply that 68% hospitals were variable returns to scale technically efficient; and only 42% hospitals achieved scale efficiency. On average, inefficient hospitals could have increased their outpatient visits by 5.05% and hospital discharges by 3.42% using the same resources. Our second-stage analysis shows that the ratio of outpatient visits to inpatient days and average length of inpatient stay are significantly correlated with hospital inefficiencies. This study shows that routinely collected hospital data in Eritrea can be used to identify relatively inefficient hospitals as well as the sources of their inefficiencies.

Project description:BackgroundIn 2017, the Kenyan Ministry of Health integrated provision of pre-exposure prophylaxis (PrEP) into public HIV-1 care clinics as a key component of the national HIV-1 prevention strategy. Estimates of the cost of PrEP provision are needed to inform the affordability and cost-effectiveness of PrEP in Kenya.MethodsWe conducted activity-based micro-costing from the payer perspective to estimate both the financial and economic costs of all resources and activities required to provide PrEP in Kenya's public sector. We estimated total and unit costs in 2019 United States dollars from a combination of project expense reports, Ministry of Health training reports, clinic staff interviews, time-and-motion observations, and routinely collected data from PrEP recipient files from 25 high-volume HIV-1 care clinics.ResultsIn the first year of programmatic PrEP delivery in 25 HIV-1 care clinics, 2,567 persons initiated PrEP and accrued 8,847 total months of PrEP coverage, accounting for 2 % of total outpatient clinic visits. The total financial cost to the Ministry of Health was $91,175, translating to an average of $10.31 per person per month. The majority (69 %) of financial costs were attributable to PrEP medication, followed by administrative supplies (17 %) and training (9 %). Economic costs were higher ($188,584 total; $21.32 per person per month) due to the inclusion of the opportunity cost of staff time re-allocated to provide PrEP and a proportional fraction of facility overhead. The vast majority (88 %) of the annual $80,811 economic cost of personnel time was incurred during activities to recruit new clients (e.g., discussion of PrEP within HIV-1 testing and counselling services), while the remaining 12 % was for activities related to both initiation and maintenance of PrEP provision (e.g., client consultations, technical advising, support groups).ConclusionsIntegration of PrEP provision into existing public health HIV-1 care service delivery platforms resulted in minimal additional staff burden and low incremental costs. Efforts to improve the efficiency of PrEP provision should focus on reductions in the cost of PrEP medication and extra-clinic demand creation and community sensitization to reduce personnel time dedicated to recruitment-related activities.Trial registrationClinicalTrials.gov registration NCT03052010 . Retrospectively registered on February 14, 2017.

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Persistent Cost Efficiency at Public Community Colleges in the US: A Stochastic Frontier Analysis

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