Efficiency Analysis Of Town Hospitals In Rural Area

Background: Town hospitals are important chains of health care system in ruralarea of China. And they provide medical and prevention cares to satisfy residents'health needs. But their inefficiency is increasingly being a big problem of health caresystem in rural area. It is necessary that measuring efficiency of health care by applyingappropriate methods, in order to manage town hospitals better. Objective: This paperhas two aims: (1) To measure the efficiency of town hospitals by different method andto compare their results; (2) To find out what factors influence efficiency of health careat town hospital level. Then tabling a proposal for ensuring that health resources areallocated well in rural area. Data: Data of 25 town hospitals in Liao Ning province wascollected, including health resource input and health care output per town hospital from1985 to 2000. Method: (1) Clustering analysis and Multiple factor analysis wereapplied to picks out factors that influence efficiency of sample. (2) Data EnvelopmentAnalysis (DEA) based-output and stochastic frontier productive function (SFA) wereused to measure efficiency of health care. Result: (1) Health resource inputs wereincreasing, but the output were decreasing during 1985-2000 periods. (2) The efficiencyof town hospitals was influenced by many factors. External influential factors were theratio of pregnant women, the number of death annually and subsidies to town hospitals.And internal influential factors were managing status of town hospitals, the salary levelof health staffs and the asset of buildings. (3) Both DEA and SFA indicate that there arehigh levels of inefficiency in town hospitals of study area. The average efficiency scoreis 0.477. Conclusion: Both DEA and SFA can measure efficiency of health care. Andthe results will be more useful by using two methods at the same time, if the data andtime allow. Suggestion: (1)Controlling the scale of town hospitals in order to improveeconomics of scale at town hospital level in rural area. (2) Improving the external andinternal environment of town hospitals will make efficiency of town hospitals better. (3)Establishing information system of health resource distribution and health servicedelivery. Then police-makers can measure the efficiency of health service provider continually to ensure that health resources are used properly.