Productivity change and its driving forces in Chinese healthcare sector.

Tomas Baležentis,Zhensheng Chen,Xueli Chen,Bing Xue,Vivian Valdmanis,Xiaoqing Gan

doi:10.1371/journal.pone.0243460

Abstract

Since the last medical reform in 2009, China’s public hospitals have been facing the changes in the institutional environment. However, the effects of reforms have not been received enough attention to deliver evidence-based implications. In this paper, we first assess the efficiency of regional public hospitals from 2011 to 2018, employing a proposed method based on an additive indicator and an aggregate directional distance function (DDF). The method applied allows for decomposing total factor productivity (TFP) indicator into three components, including technical efficiency change (TEC), total productivity (TP) and scale efficiency change (SEC). Second, following the efficiency assessment, we carry post-efficiency analysis to identify the determinants of efficiency of the public hospitals. The results show that annual average TFP growth rate is 1.38%, which is driven mainly by TEC. Regional disparities of public hospitals’ performance are expanding. Almost 75% of the regions considered show a positive TFP growth. The regression results show that the significant determinants of efficiency of regional public hospitals include the price of and demand for health services.

Highlights

The key goal of a healthcare system is to provide equitable and accessible healthcare services efficiently
The second column shows that the average annual productivity growth (1.38%) for the entire sample is mainly driven by technical efficiency change (TEC) (0.65%), which implies that resources in public hospitals have been exploited in a more reasonable manner
We found that the price of inpatient service has negative effect on total factor productivity (TFP), TEC and scale efficiency change (SEC), which indicates that reducing the price will improve the efficiency of the public hospitals

Summary

Introduction

The key goal of a healthcare system is to provide equitable and accessible healthcare services efficiently. As the major provider of healthcare services in China, public hospitals play an important role in the medical system, accounting for 54.69 percent of hospitals and 85.84 percent of visits, and incurring the majority of healthcare expenditure [1]. In the period of rapid economic growth in China, the government’s investment in the health sector have been used to establish new public hospitals and expand the scale of public hospitals to meet the growing demand for medical services.

Objectives

Methods

Findings

Discussion

Conclusion