By employing data envelopment analysis (DEA), this study examines efficiency of\nfaith-based (private not for profit-PNFP) hospitals in Tanzania. Using data from 15 hospitals,\nparticularly Volunteering Agency Hospitals (VAHs), our study period covered the year 2009-\n2012. The objective of this study is to determine technical efficiency of Volunteering Agency\nHospitals (VAHs) as well as scale efficiency and hence establish how the inefficiency in these\nhospitals (VAHs) can be reduced in Tanzania. Significance of this Study premises on\nequipping the hospitals administrators, governing boards, owners as well as healthcare policy\nmakers with relevant information on how to improve hospitals efficiency. Additionally,\nthrough deliberating on the generalization of efficiency of the faith-based hospitals the study\nwill add to the existing literatures on the efficiency of religious hospitals particularly in\nTanzania.\nBased on measures of technical efficiency the average efficiency index (for all hospitals) was\n0.769 (76.9%) and total number of technically efficient was 4 (26.6%) hospitals. The result\nshows that, average annual technical efficiency for the VAHs was 59.79% in the year 2009,\n60.01% in the year 2010, 57.49% in the year 2011 and 55.08% in the year 2012, which\nimplies that there was no improvement in the technical efficiency. However, most of the\nhospitals (73.33%) have increasing returns to scale (IRS) which means therefore that, if more\nresources will be equally allocated to these hospitals (with IRS) there will be proportionate\nincrease in production of health services hence catching up the production frontier.
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