Factors Influencing Community Health Centers’ Efficiency: A Latent Growth Curve Modeling Approach

The objective of study is to examine factors affecting the variation in technical and cost efficiency of community health centers (CHCs). A panel study design was formulated to examine the relationships among the contextual, organizational structural, and performance variables. Data Envelopment Analysis (DEA) of technical efficiency and latent growth curve modeling of multi-wave technical and cost efficiency were performed. Regardless of the efficiency measures, CHC efficiency was influenced more by contextual factors than organizational structural factors. The study confirms the independent and additive influences of contextual and organizational predictors on efficiency. The change in CHC technical efficiency positively affects the change in CHC cost efficiency. The practical implication of this finding is that healthcare managers can simultaneously optimize both technical and cost efficiency through appropriate use of inputs to generate optimal outputs. An innovative solution is to employ decision support software to prepare an expert system to assist poorly performing CHCs to achieve better cost efficiency through optimizing technical efficiency.