Efficiency Of Public Hospitals In China And Its Influencing Factors

BackgroundAt present,96%of hospitals in our country are public hospitals, which concentrate the most high quality medical and health resources, the reform of public hospitals is also considered as "the hardest bones to chew " and "top priority" in the reform. Therefore, the reform of public hospitals is closely related to the life of the people, every move attracts peoples’attention.As further reform of China’s economic system, the hospitals have gradually grown into the economic entities which operate independently and are responsible for their own profits and losses and have an independent legal status from the social public welfare enterprises. In the present environment of profit of socialized production being average, market being relatively stability and the rising space of product price being narrow, how to give attention to the social and public welfare undertakings of the hospital and improve the efficiency of the hospital; In the management of the public hospital, how to not only improve the social benefits of the hospital, but improve the economic benefits of the hospital, become the urgent matter of the hospital. As the public hospital, improving the efficiency of the hospital is an inevitable way to take social responsibility and develop its own economy. Efficiency of hospitals should comprehensively consider the social benefits and economic benefits. In the process of management of the hospital efficiency, we should regard patients’benefits as the center, in the premise of improving medical effect, reduce the medical cost, produce good social benefits and improve the social reputation and influence of the hospital, which attract patients to go to the hospital, increase the volume of medical business, and strive to reduce operating costs, improve the surplus balance of payments to improve the economic benefit of hospital in such a way. Social benefits obviously have a positive effect to economic benefits, at the same time good economic benefits can develop more health resources with high quality, meet people’s increasing needs of medical treatment better, and also have a positive effect to social benefits.To improve the efficiency of the hospital, we should solve the problem of how to scientifically and accurately evaluate efficiency of the hospital. Hospital efficiency mainly include "technology efficiency","scale efficiency" and "allocation efficiency".Only the accurate judgment for the technology efficiency, scale efficiency and allocation efficiency of the hospital and the quantitative analysis to the degree, links and reasons of low efficiency, can we provide objective basis to improve the efficiency of hospital for hospital administrators.Because the provision of medical and healthy service is strongly professional, technical and has strong information asymmetry, thus it is complex, so the evaluation on hospital efficiency is difficult to use a single index to measure. At present, the method commonly used to evaluate hospital efficiency mainly includes four kinds, namely ratio analysis, regression analysis, the data envelopment analysis and stochastic frontier analysis. Due to the healthy industry has the character that it has many inputs and outputs, the traditional ratio analysis method such as cost-benefit method, cost effective method and cost effectiveness analysis in the evaluation of hospital efficiency is not applicable. The data envelopment analysis (DEA) of the parameter analysis methods is widely used to evaluate the operation efficiency of organizations with complicated input-output relation, such as schools, hospitals, banks and public departments and so on.DEA can not only determine the technical efficiency value and scale efficiency value of hospitals, but are able to quantitatively analyze the existing problem in the input and output aspects of the hospitals with low efficiency, so it will provide decision basis for the hospital administrators to improve the efficiency of the hospital.In addition, this paper also analyzes the hospital efficiency from a cost perspective, uses the cost estimation methods researched by the Calculating Center of the Health Economic Institute of the Health Ministry in2008, and calculates its department cost, part of the medical service item cost and the times of diagnosis and bed days cost and its composition of the hospitals of different levels and different region combined with the data in2008provided by the selected hospitals. Analyze and compare the differences between the cost of medical service and the price and provide scientific basis for the government to compensate public hospitals reasonably, which contributes to controlling the total cost, the department cost and the medical service item cost of hospitals, improving efficiency and providing the basis for the economic management of hospitals.Based on the calculation of the efficiency of the hospital, we can get which hospital efficiency is high, which hospital efficiency is low. And there are many factors influence hospitals, such as hospital level, hospital area, the number of hospital staff, medical personnel and administrative personnel’s scale, medical equipment value, housing building, fixed assets value, outpatient clinic visits, per capita expenses, bed day cost, discharged patients average medical expenses, medical income, drug income, etc., exactly what factors can influence the efficiency of the hospital, they will have a positive impact or negative effects?We need to do further research, so as to find out factors that have significant influence on hospital efficiency, improve these factors targeted, in order to improve the efficiency of the hospital.ObjectivesThe overall goal of this research is to analyze the efficiency of the hospitals and to analyze the influenced factors of the efficiency of the hospitals, to put forward policy suggestions for hospitals to improve its efficiency. (1) establishing evaluation theory and methodology model of the efficiency of the public hospital;(2) analyzing the efficiency of the public hospital in our country;(3) analyzing the affecting factors of the efficiency of hospitals(4) analyzing and comparing the differences between the cost of medical service and the price;(5) putting forward suggestions to improve the allocated efficiency of the hospital resource for hospitals.MethodsThe material of this paper comes from the data of57hospitals attending cost monitoring work of the national medical institution in2008. This cost monitoring work is entrusted by the Department of Planning and Finance of the Health Ministry, according to the division standard of the eastern, middle and western economic zone in the nation, and selects12provinces, municipalities and autonomous regions as the cost monitoring point of the national medical institutions, of which4provinces come from the eastern region,4provinces come from the middle,4provinces come from the western region. In each province, we respectively choose two provincial hospitals, three municipal hospitals and three county level hospitals, giving a total of96hospitals to monitor cost. There are24provincial hospitals,36municipal hospitals and36county level hospitals, which has considerable representativeness and comparable significance. We began the first round of cost monitoring work from May2009, and there were57hospitals across the country provide a complete set of cost calculating data by February2010, the overall participating rate is59%, the participating rate of the east, the middle and the west are respectively66%,56%and56%. The participation rate of provincial, municipal and county level hospitals are respectively58%,58%and61%.This paper describes the basic information of the sample hospitals by using descriptive method, including the number of employees, total revenue and total expenditure, medical income and medical expenditure,medicine income and medicine expenditure, total value of fixed assets, total value of equipments; the average number of discharged patients, the average hospitalization days,and the average hospitalization expenses of hospitals of different regions and different levels and so on. On the analysis of the data in the process, to the same area and the same level hospital data induction, sorting and comparison, the analysis indicators were selected in the same level with different regions in the hospital, the maximum and the minimum value is calculated, and the average of the hospital, through the sample hospital this descriptive analysis can clearly understand each index data in the same region in the hospital with level fluctuations, and the gap between different level or different regions hospitals.On the basis of surveyed data, we use the "hospital medical service cost calculating method" developed by the Health management and Policy Research Center of Shandong University(the Cost Calculating Center of the Health Economic Institute of the Health Ministry), that is apportioning the total cost of hospitals to the medical service items by using the apportionment method from top to down, the apportioning process is divided into three steps:first, apportioning the total cost of hospital medical service to all medical service departments (including indirect cost departments and direct cost departments); second, apportioning the cost of indirect cost departments to cost of direct cost departments; third, apportioning the cost of direct cost departments to all medical service items. According to the three steps to calculate the total cost, medical cost, drug cost, the proportion of medical cost in the total cost, the cost composition ratio of medical cost, the ratio of total expenditure and total income,the ratio of medical expenditure and medical income, department cost, some representative service item cost, diagnosis times expenses and cost and medical service item cost and the proportion of charging standard and so on.When we empirically study the efficiency of sample hospitals, DEA model we used has the following characteristics:(1) DEA distance function type is CCR model in the radial model (Radial);(2) DEA efficiency measuring direction (Orientation):investment guide;(3) Efficiency calculation of DEA is based on the variable returns to scale (VRS), and then analyze the scale efficiency.By screening of three kinds of index screening methods which is correlation analysis, coefficient of variation analysis and cluster analysis combining with the demand that evaluation indicators should integrally reflect the quality oriented demand of the hospital scale, efficiency, effectiveness and other aspects, we ultimately determine4input indexes and4output indexes applied to the analysis of DEA,which respectively are four input indexes(the total number of employees, the actual number of beds opened, the total value of fixed assets and total medical expenditure); four output indexes (the number of outpatients, the number of emergency visits, the number of people leaving hospital and total business revenue).In the analysis of the influencing factors of the hospital efficiency, we use the TOBIT regression analysis.The dependent variable is scores of hospitals’DEA efficiency, and independent variables include financial subsidy ratio, the total number of employees, staff and administrative staff ratio, actual number of beds opened, beds occupancy, outpatient hospitalization ratio, total value of fixed assets, total value of instruments and equipments, the proportion of the value of instruments and equipments in the total value of fixed assets, medical expenditure, the number of outpatients, the number of emergency, the number of leaving hospital, total medical revenue, the number of patients in hospital operation, the average length of stay hospital, total bed days in hospital, utilization rate of hospital beds, charge level of each outpatient visit, average charge level per day of each bed, average drug charges per day of each bed, average medical charges of patients leaving hospital, administrative expenses, the proportion of drug income in the business income, emergency visits and so on.Main ResultsI, the results of cost monitoring 1. In the57hospitals attending cost monitoring, the average total cost of provincial, municipal and county level hospitals is respectively660000000,360000000and130000000yuan. The total cost of provincial, municipal, county level hospitals in the east is significantly higher than that in the middle and the West at the same level, but there is little difference between the total cost of hospitals in the east and the west.2. Labor cost accounts for the largest proportion in the medical cost, which respectively is40%、45%and48%in the provincial, municipal and county level hospitals.Material cost following labor cost is respectively32%,27%and25%, of which the highest proportion is the provincial hospital.3. In the57hospitals attending cost monitoring, the average hospital visits cost of provincial, municipal, county level hospitals is respectively169yuan,158yuan and117yuan.The hospital visits cost of provincial, municipal and county level hospitals in the east is higher than that in the middle and the west corresponding to the level.But there is little difference between the hospital visits cost in the east and the west. At present, in hospitals at all levels to provide a clinical time medical service, drug cost accounts for more than50%of the proportion, and in the medical cost, most of the cost from the test and inspection service. That is currently all levels of hospital provides the diagnosis time service, is mainly to provide drugs, inspection and test mainly services.4. In the57hospitals attending cost monitoring, the average hospital bed days cost is respectively978yuan,677yuan and481yuan. The average hospital bed days cost of the provincial, municipal and county level hospitals in the east is significantly higher than that in the middle and the west corresponding to the level. In hospitals at all levels to provide a bed, medical service, drug costs accounted for only40%of the proportion, the rest of the cost from the medical cost, but need to pay attention to, in the medical cost, from indirect medical assistant department cost occupies certain proportion, the cost composition analysis results for hospital provides scientific basis for cost control.5. Regardless of the grade of hospitals and hospital geographic distribution, overall speaking,57hospital a balance of payments surplus,most of the hospital hospital costs than medical income.Along with the level in the hospital,the eastern region of medical costs are higher than the medical income.Only the central at or above the county level of the hospital and the west at or above the county level at the provincial level hospital medical cost less than medical income.II, the results of DEA efficiency analysisIn the57hospitals, there are21DEA effective units accounting for37%, in which there are6provincial hospitals,3municipal hospitals,12county-level hospitals.There are17provincial hospitals whose efficiency is35.3%,18municipal hospitals whose efficiency is16.7%and22county-level hospitals whose efficiency is54.5%. Visible according to regional perspective, the western region hospital efficiency is highest; And according to hospital level, the county hospital efficiency is highest.There are7general effective hospitals in21hospitals of the east, of which there are4the provincial hospitals,2municipal hospitals and1county-level hospital.And there are8provincial hospitals,6municipal hospitals,7county level hospitals in21hospitals of the east, so the efficiency of the provincial hospital in the east is50%, the municipal hospital is33.3%, the county level hospital is14.3%.There are5general effective hospitals in18hospitals of the middle, of which there are1the provincial hospital,1municipal hospital and3county-level hospitals. And there are4provincial hospitals,8municipal hospitals,6county level hospitals in18hospitals of the middle. Visibly, the county level hospital has the highest efficiency in the middle which is60%, the municipal hospital is12.5%and the provincial hospital is25%.There are9general effective hospitals in18hospitals of the west, of which there are1the provincial hospital,0municipal hospital and8county-level hospitals. And there are5provincial hospitals,4municipal hospitals,9county level hospitals in18hospitals of the middle. Visibly, the efficiency of the provincial hospital in the west is20%, the municipal hospital is0and the county level hospital reaches88.9%.There are36units that DEA scoring is not effective accounting for63%of all hospitals.Generally speaking, the western hospitals’overall efficiency is highest in this survey,especially the efficiency of the investigated hospitals in Sichuan and Yunnan province is very high,which is significantly higher than the relative efficiency in1997,and the overall efficiency of hospitals in south-east coastal areas is higher than that in the central region.Ⅲ, the results of affecting factors of the hospital efficiency by using Tobit regression analysisThe results by using Tobit regression analysis to analyze the affected factors of efficiency shows that the factors significantly affected the hospital efficiency include:1. Outpatient fees per person, hospital bed days cost, medical expenses per person leaving hospital, utilization rate of hospital beds, the total value of fixed assets; But the medical staff and administrative staff ratio has no significant influence on hospital efficiency. Among them, outpatient fees per person, medical expenses per person leaving hospital and the total value of fixed assets are in negative correlation with hospital efficiency, and these several factors can significantly reduce the hospital efficiency; utilization rate of hospital beds and hospital bed days cost have an positive effect on hospital efficiency, and these two factors can significantly increase hospital efficiency.2. From the view of region, hospital bed days cost and medical expenses per person leaving hospital have a consistent effect on hospital efficiency of the east, the middle and the west. However the effect of outpatient fees per person becomes less significant; The utilization rate of hospital beds only has a significant impact on hospital efficiency of the eastern region while there is no significant effect on hospital efficiency of the middle and the west; The total value of fixed assets significantly decreases the hospital efficiency of the west while there is no significant effect on hospital efficiency of the middle and the west; The medical staff and administrative staff ratio only has a significant effect on hospital efficiency of the western region, which has significance at a10%level. The hospital efficiency of different regions not only has the same affected factors, but there are various regional factors. 3. The hospitals of different level have their own characteristics and their affected factors of hospital efficiency also are the different.The hospital bed days cost has a significantly positive impact on the hospital efficiency of each level, and medical staff and administrative staff ratio has no significant effect on hospital efficiency of each level; The outpatient fees per person and total value of fixed assets significantly decrease the efficiency of provincial and municipal hospitals, but there is no significant effect on the efficiency of the county hospitals efficiency; The medical expenses per person leaving hospital significantly decreases the efficiency of provincial and county level hospitals,but there is no significant effect on the efficiency of municipal hospitals efficiency;The utilization rate of hospital beds has a significantly negative effect on the efficiency of municipal and county level hospitals, but there is no significant effect on the efficiency of provincial hospitals.Ⅳ. the results of the medical service project cost and price comparison1.120kinds of medical service projects,(results of eliminating extreme)the proportion of project cost greater than the charging standard project quantity proportion in the province, city and county hospital were92%,97%and99%. After deducting the financial appropriation and depreciation of fixed assets, in the province, city and county hospital project cost is greater than the charging standard project quantity proportion still have84%,86%and82%. The results show that in120kinds of monitoring of the medical service programs, most of the service fee standard is below the cost. The medical service fees and project average cost has a great distance, so medical service charge can not make up for the cost of medical service consumption.2. In the provincial hospital, project cost more than the level of fees charged multiple between1times (common eye) to6times (emergency inspecting fee). In municipal hospital, project cost and charge standard of multiple change is bigger, ratio between1times (growth hormone releasing hormone excited test) to21times (emergency inspecting fee), and this ratio in the county level hospital is between in1times (B supernormal inspection) to15times (infrared therapy); And projects that reflect the medical staff technology and labor value of medical service, such as effective emergency treatment, care, beds, dressing, registered, etc., project cost is greater than the current charging standard. But, no matter the hospital level, hospital service that cost is less than charging standard are the use of large-scale equipment to carry out inspection class services and use high and new technology in treatment of service projects, such as color doppler ultrasonic routine inspection, gamma knife treatment, excimer laser refractive sex corneal orthotics, etc.Conclusions and Policy Implications1. By the DEA efficiency analysis on57hospitals attending the cost monitoring, we found that we should emphatically strengthen resource management and construction of county level hospitals in the eastern coastal areas and emphatically strengthen the management and resources inputting of the municipal hospitals in the middle and the west. Gradually promote the comprehensive reform of the county level hospitals. Develop county-level hospitals’comprehensive reform program. 2. Hospital level,the outpatient fees per person, the medical expenses per person leaving hospital and the total value of fixed assets are in negative correlation with hospital efficiency which significantly reduce the hospital efficiency; The utilization rate of hospital beds and hospital bed days cost have positive effect on hospital efficiency which will significantly increase the efficiency of hospitals.Therefore, we should focus on reducing the outpatient fees per person, the medical expenses per person leaving hospital and the total value of fixed assets and improving the utilization rate of hospital beds and hospital bed days cost in order to improve hospital efficiency.3. In the monitoring of120medical service items, more than90%of the medical service items’ charges are lower than the cost. The cost of the medical service items reflecting technology and labor value of medical staff is greater than the current charges.Most medical service items whose cost is less than charges use large equipments to carry out the inspection service projects and use high and new technology to carry out the treatment service items regardless of the level of hospitals.4. In the hospital visits cost of57hospitals attending monitoring, the average hospital visits cost of the provincial hospitals is significantly higher than that of the municipal hospitals and the county level hospitals. The drug cost accounts for a large proportion in the hospital visits cost, while testing and inspection services occupy a large proportion in the medical cost regardless of the level and the location of the hospitals. These show that the diagnosis service provided by hospitals of each level mainly provide medicines, examination and laboratory tests at present. But the service cost also is reflected better in this service and occupies the largest proportion in the direct medical cost.5. By the analysis on the hospital bed days cost of hospitals of each level, we found that the hospital bed days cost of the provincial hospitals is higher than that of municipal hospitals and the county level hospitals; From the view of region, the average hospital bed days cost of hospitals in the east is far higher than that in the middle and the west at the same level. In the composition of hospital bed days cost, direct medical cost accounts for the highest proportion and the proportion of the drug cost is relatively less. Notably, indirect medical auxiliary department cost occupies a certain proportion in the medical cost.6. But the overall participation rate of hospital attending cost monitoring is only60%, which is mainly because part of the hospitals attending cost monitoring was not familiar with the requirements of the online data acquisition system. And we found that part of the cost data has outliers in cost analysis process, which is possibly because the collection data of the related cost information of hospitals is not accurate, but now we can only verify the logic of the collection of the cost data and can’t verify whether the collection of the cost data is reasonable and accurate, which need to perfect in the next cost monitoring work.