The evaluation of efficiency in nursing home
care provision in Ireland is an important research area as nearly every EU country
is faced with the prospect of a population that is getting older, and
eventually smaller, given current population age structures, increasing life
expectancy, and birth rates which are under the reproduction rate. It is the increase in the ‘oldest’ old that is
going to be most dramatic, the over 80s. Nursing Homes Ireland (NHI) data already
indicate a “significant national deficit” of long-stay beds for older people
who will need them, and that demand for residential care is going to increase considerably
in the next decade. The aim of this
paper is to rigorously evaluate and choose the most appropriate method to
measure technical efficiency for 59 public and 93 private Irish nursing homes
using data for the period 2008-2009. Technical
efficiency is preferred to economic efficiency as it is difficult to justify the
behavioural assumption of cost minimisation for the Irish nursing homes being
examined, and to obtain reliable information on their costs of inputs. We apply an input-oriented DEA method in
order to assess if, and by how much, capital and, in particular, labour inputs
can be reduced while remaining at the same level of output. Furthermore, both CRS and VRS DEA models are
used to examine the issue of scale
inefficiencies. We also implement a bootstrap
procedure to correct for any bias in the DEA estimators and to obtain
confidence intervals for the efficiency scores.