Measuring the efficiency of public hospitals: A multistage data envelopment analysis in Fujian Province, China

Abstract

ObjectiveThe present study aimed to evaluate the operational efficiency of public hospitals in Fujian Province and the factors responsible for the inefficiency of these hospitals and provide relevant suggestions for health policymakers in allocating service resources.MethodIn the first stage of the research, the variables affecting the efficiency of hospitals were extracted by qualitative and quantitative methods, including literature optimization, gray related analysis and gray clustering evaluation. In the second stage, the data envelopment analysis (DEA) method was used to evaluate the operational efficiency of 49 hospitals of different levels and types selected by sampling in 2020. Finally, a Tobit regression model with introduced institutional factors and background factors was established to study the main influencing factors of hospital inefficiency.ResultsIn the first stage, 10 input variables and 10 output variables necessary from the mangers' point of view were identified to test efficiency. In the second stage, the average comprehensive TE, PTE, and SE of 49 sample hospitals was 0.802, 0.888, and 0.902, respectively. 22.45% of these hospitals met the effective criteria, i.e., the overall effective rate was 22.45%. The low SE value of the hospital was the main reason hindering the improvement of the comprehensive efficiency value. The overall effective rate of secondary public hospitals (30.77%) was higher than that of tertiary public hospitals (19.44%), and the overall effective rate of public specialized hospitals (30%) was higher than that of general public hospitals (18.92%). Based on the third stage results, the bed occupancy rate (BOR) and the proportion of beds (POB) were major factors affecting the operation efficiency of grade III hospitals (p < 0.01). However, the operating efficiency of grade II hospitals was significantly affected by POB and regional per capita GDP(GDPPC) (p < 0.05). Moreover, the impact of BOR and GDPPC was positive, and POB was negatively correlated with hospital operation efficiency.ConclusionsThe study results indicated that the overall operation efficiency of public hospitals in Fujian Province is low. This study revealed that intervention should be strengthened from a policy and management perspective to improve the operation efficiency of public hospitals.

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“…Government hospitals had undergone inefficiencies in the early of the pandemic. This also happened in several countries such as those in Fujian Province, China (Sun et al, 2023), Kosovo (Karma and Gashi, 2022), and Egypt (Habib and Mourad, 2022). This aligned with Taiwan's hospital effectiveness, where private hospitals typically demonstrated good operational performance (Lin et al, 2022).…”

“…Hospital inefficiencies in 2020 and 2021 occurred in various hospitals across different countries, such as those in Fujian Province, China (Sun et al, 2023), Kosovo (Karma & Gashi, 2022), and Egypt (Habib & Mourad, 2022). The COVID-19 pandemic also contributed to hospital inefficiency during this period.…”

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“…(2) Efficiency evaluation study of public hospitals. Based on the measured data of 49 tertiary public hospitals, MSun et al (2023 in Fujian Province) introduced the Tobit regression model to evaluate the operation efficiency of public hospitals in Fujian Province [25]. Sultan et al (2018) used data envelope analysis to evaluate and analyze the relative productivity of public hospitals in Jordan [26].…”

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