Relative efficiency and productivity: a preliminary exploration of public hospitals in Beijing, China

BACKGROUND: Third-grade hospitals in Beijing have been rapidly developing in capacity and scale for many years. These hospitals receive a large number of patients, and ensuring their efficient operation is crucial in meeting people’s healthcare needs. In this context, a study of their relative efficiency and productivity would be helpful to identify the driving factors and further improve their performance. METHODS: After a review of literature, the current numbers of open beds and employees were selected as input variables. The number of outpatient and emergency visits and the number of discharged patients were selected as output variables. A total of 12 third-grade Class A general public hospitals in Beijing were selected for a preliminary study. The panel data from 2006–2009 were collected by the National Institute of Hospital Administration, Ministry of Health of P.R. China. Descriptive analysis and data envelopment analysis were used to analyze the data using Stata 10.0 and DEAP(V2.1) software. RESULTS: In the 2006–2009 period, descriptive results show that sample hospitals continuously expanded their capacity and scale, with growth rate of total revenue being the highest among all variables. The DEA results show that the average annual growth rate of productivity was 26.7%, and the rates were 47.3%, 21.3% and 13.8% respectively for two consecutive years. The average annual growth rate of technological change was 28.3%, and the rates were 49.4%, 21.5% and 16.4% respectively for two consecutive years. The average annual growth rate of technical efficiency change was -1.3%, and the rates were -1.4%, -0.02% and -2.2% respectively for two consecutive years. CONCLUSIONS: The sample hospitals in Beijing experienced substantial productivity growth, but annual growth rates were declining. Substantial technological change was the main contributor to the growth. Although some hospitals exhibited improvements in technical efficiency, there was a slight decline in general. To improve overall efficiency and productivity, both government and hospitals need to further drive positive technological change, technical change, and allocative efficiency of public hospitals. More empirical studies are needed to include more hospitals of all three grades at a larger scale.