The impact of introducing case mix on the efficiency of teaching hospitals in Malaysia

Introduction In Malaysia, work on case mix based on DRG (Diagnostic Related Groups) was initiated in 1996 with the establishment of a case-mix research team consisting of representatives from the Ministry of Health, the University of Malaya, the University of Kebangsaan Malaysia, and the University of Science Malaysia. This team conducted a research project involving 12 public hospitals in Malaysia, including three university hospitals. The Hospital University of Science Malaysia (HUSM) and University of Malaya Medical Centre (UMMC) were involved in the research project but, until now, they have not completely implemented case-mix systems in the management of their hospitals. The University Kebangsaan Malaysia Medical Center (UKMMC) was the first hospital in the country to fully implement a case-mix system, which has been in existence since July 2002. The main objective of this paper is to assess, using a Stochastic Frontier Analysis (SFA), whether the introduction of the case-mix system into the three university hospitals in Malaysia has improved efficiency. The hypothesis for the study is that the implementation of a case-mix system would improve the level of efficiency.