VERSION 1 ACCTG 323 a) Explain the results for Autumnfell Hospital, commenting on their efficiency scores, target values, and why differences arose under CRS and VRS. Calculate the scale efficiency for Autumnfell Hospital and explain what it means. (6 marks) b) Describe an action the Ministry of Health could undertake using the DEA results. Consider the following, noting how the above DEA information could be used: What hospitals should be targeted? What actions should be taken at each of these target hospitals? What other DEA information could be useful for this? (4 marks) c) The manager of Lowgarden Hospital is protesting the validity of this information, claiming that there are many environmental factors that influence the cost of inputs, the number of patients treated, and the efficiency of processes. Notably, she has identified that her hospital is considerably more isolated even by rural standards. This means that there is much greater cost involved in obtaining medical supplies and attracting staff. The community also has a larger proportion of older people. Discuss another method of performance analysis that could be used in conjunction with DEA to level the playing field. Identify how the above three factors could be incorporated and how each of them could be measured. (5 marks) Total for question: 15 marksVERSION 1 ACCTG 323 SECTION A This section has THREE compulsory questions worth 47 marks in total. QUESTION 1 Analysis of hospital performance can differ from other service entities as they have to pursue multiple objectives including financial, clinical, and societal goals. As a consequence, performance analysis needs to consider the efficiency with which hospitals convert resources used into outputs connected to those objectives. The Ministry of Health has recently identified a group of rural hospitals that provide a limited range of hospital services. Rather than comparing results to larger city hospitals, which provide a full-range of services, the rural hospitals should be analyzed separately to identify achievable performance targets. The Performance Analysis Unit at the Ministry of Health has prepared an initial analysis for all sixty three hospitals classified as rural. Detailed below is an extract of the results for these hospitals. S1 is Inpatient Volumes; $2 is Outpatient Volumes; and S$ is Operating Expenditure. Output orientation, CRS Output orientation, VRS DMU Original Target DMU Original Target Autumnfell S1 49472 61595.74 Autumnfell S1 49472 49472 Efficiency: $2 139440 173612 Efficiency: S2 139440 139440 80.3% S$ 188951 188951 100.0% S$ 188951 188951 Bay of Bay of Dorne SI 13542 13542 Dorne SI 13542 13542 Efficiency: S2 38072 38072 Efficiency: S2 38072 38072 100.0% S$ 41625 41625 100.0% S$ 41625 41625 Castle Castle White SI 33425 38331.77 White S1 33425 33425 Efficiency: S2 141663 162459.1 Efficiency: S2 141663 141663 87.2% S$ 118415 118415 100.0% S$ 118415 118415 Dothranaki S1 21815 28699.42 Dothranaki S1 21815 25751.37 Efficiency: S2 87925 115672.5 Efficiency: $2 87925 103790.5 76.0% S$ 88152 88152 84.7% S$ 88152 88152 Lowgarden S1 30283 40745.88 Lowgarden S1 30283 36013.41 Efficiency: $2 80689 108567 Efficiency: $2 80689 95958 74.3% S$ 124992 124992 84.1% S$ 124992 124992 Management is reviewing the results and have asked you to explain the DEA model, what the results represent, and applications of the analysis by answering parts (a) - (c). Page 2 of 7