ABSTRACT
Hospitals play a very important role in the provision of health care services. Their productivity and efficiency greatly affect the performance of China’s health care system. A study of hospitals in Guangdong province produced very interesting results: the 463 hospitals sampled were quite inefficient but nevertheless productive between 2004 and 2008 (Ng 2011). This seemingly contradictory result mainly originated from pure technical inefficiency each year and technological progress over time. Ng inferred that the inefficiency results were a reflection of revenue-based hospital behaviours: unnecessary care, over-prescription of drugs and the adoption of high-tech treatments. The findings on the productivity and efficiency of hospitals also show regional disparity. By estimating the efficiency of 57 hospitals whose costs were monitored by the Ministry of Health, Sun et al. (2012) found that total factor productivity (TFP) was highest among hospitals in western China and that the TFP of hospitals in eastern China was higher than that in central regions.
