Health resource allocation and productive efficiency of Chinese county hospitals: data from 1993 to 2005

This study aims to assess trends in the productive efficiency of China's county hospitals during the economic transition using data from 1993 to 2005. A data envelopment analysis (DEA) framework was used to calculate the efficiency score of county hospitals in all 31 provinces. A C²R model and a BC² model were devised to respectively calculate overall and scale efficiency and pure technical efficiency at the hospital's current scale. Models included four inputs (number of medical staff; number of beds; value of fixed capital; and hospital expenditures) and three outputs (outpatient and emergency visits, number of inpatients, and hospital revenue) in total. As the results, geographical disparities in health resource allocation and county hospital productivity were noted. From 1993 to 2005, the number of county hospitals increased and their inputs, e.g. fixed capital in particular, grew rapidly. However, the amount of both outpatient and inpatient services declined somewhat especially in the middle and the western regions. The overall efficiency at the national level decreased slightly. County hospitals in the eastern region tended to have better overall, scale, and technical efficiency in comparison to the middle and the western regions. In conclusion, county hospitals are inefficient due to their enlarged scale and the reduced amount of health care services they provide. This issue should be addressed especially in the middle and the western regions, where health resources are far more limited and yet wasted. The effects of ongoing health sector reform on the productivity of county hospitals must be monitored and evaluated.