Most productive types of hospitals: An empirical analysis

Hospitals comprise different types, including, for example, internal medicine hospitals, obstetrics/gynecology hospitals, and general hospitals, and physicians have specialties related to these types. Since a specialty may be supportive to some specialties and independent of some others, hospitals composed of certain departments may be more productive than those composed of other departments. This paper identifies the most productive types of hospitals by constructing one production frontier for each type of hospital and another for all types of hospitals. The relative distance between a type-specific frontier and the overall frontier, referred to as functional productivity, is a measure of how productive the corresponding type of hospital is. Twenty types of approximately seven thousand hospitals in China are investigated. The results show that general hospitals composed of all departments, general hospitals lacking only the Chinese medicine department, and hospitals with pediatrics and obstetrics/gynecology departments are the three most productive types. Not-for-profit hospitals are more productive than for-profit hospitals. The type-specific efficiencies are helpful for individual hospitals to make improvements, and the functional productivities are useful to design case-mix indexes to adjust measures of different types of hospitals to make them comparable.