The impact of New Public Management on efficiency: An analysis of Madrid's hospitals

- We deploy a bootstrapped DEA to compare hospitals' governance models in Madrid.
- We do not find evidence that new management formulas are more - or less - efficient.
- Results suggest that what matters is the management itself not the management model.

Madrid has recently become the site of one of the most controversial cases of public healthcare reform in the European Union. Despite the fact that the introduction of New Public Management (NPM) into Madrid hospitals has been vigorous, little scholarship has been done to test whether NPM actually led to technical efficiency. This paper is one of the first attempts to do so. We deploy a bootstrapped data envelopment analysis to compare efficiency scores in traditionally managed hospitals and those operating with new management formulas. We do not find evidence that NPM hospitals are more efficient than traditionally managed ones. Moreover, our results suggest that what actually matters may be the management itself, rather than the management model.