Technical Efficiency of Public and Private Hospitals in Beijing, China: A Comparative Study

Rize Jing, Tingting Xu, Xiaozhen Lai, Elham Mahmoudi and Hai Fang
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Rize Jing: School of Public Health, Peking University, Beijing 100083, China
Tingting Xu: School of Public Health, Peking University, Beijing 100083, China
Xiaozhen Lai: School of Public Health, Peking University, Beijing 100083, China
Elham Mahmoudi: Department of Family Medicine, University of Michigan, Ann Arbor, MI 48109, USA
Hai Fang: China Center for Health Development Studies, Peking University, Beijing 100083, China

IJERPH, 2019, vol. 17, issue 1, 1-18

Abstract: Objective: With the participation of private hospitals in the health system, improving hospital efficiency becomes more important. This study aimed to evaluate the technical efficiency of public and private hospitals in Beijing, China, and analyze the influencing factors of hospitals’ technical efficiency, and thus provide policy implications to improve the efficiency of public and private hospitals. Method: This study used a data set of 154–232 hospitals from “Beijing’s Health and Family Planning Statistical Yearbooks” in 2012–2017. The data envelopment analysis (DEA) model was employed to measure technical efficiency. The propensity score matching (PSM) method was used for matching “post-randomization” to directly compare the efficiency of public and private hospitals, and the Tobit regression was conducted to analyze the influencing factors of technical efficiency in public and private hospitals. Results: The technical efficiency, pure technical efficiency and scale efficiency of public hospitals were higher than those of private hospitals during 2012–2017. After matching propensity scores, although the scale efficiency of public hospitals remained higher than that of their private counterparts, the pure technical efficiency of public hospitals was lower than that of private hospitals. Panel Tobit regression indicated that many hospital characteristics such as service type, level, and governance body affected public hospitals’ efficiency, while only the geographical location had an impact on private hospitals’ efficiency. For public hospitals in Beijing, those with lower average outpatient and inpatient costs per capita had better performance in technical efficiency, and bed occupancy rate, annual visits per doctor, and the ratio of doctors to nurses also showed a positive sign with technical efficiency. For private hospitals, the average length of stay was negatively associated with technical efficiency, but the bed occupancy rate, annual visits per doctor, and average outpatient cost were positively associated with technical efficiency. Conclusions: To improve technical efficiency, public hospitals should focus on improving the management standards, including the rational structure of doctors and nurses as well as appropriate reduction of hospitalization expenses. Private hospitals should expand their scale with proper restructuring, mergers, and acquisitions, and pay special attention to shortening the average length of stay and increasing the bed occupancy rate.

Keywords: technical efficiency; data envelopment analysis; public hospital; private hospital; China (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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