How can hospitals perform more efficiently? A case study in China based on data envelopment analysis

The demand for better hospital performance and medical services has significantly increased during the recent years with the improvement in the living standards. This paper adopts the non-parametric technique of data envelopment analysis (DEA) to handle the feature of multiple inputs and outputs in the healthcare industry and investigates the hospital performance. The empirical study of 19 hospitals during the period 2008-2013, locating in one district of Shanghai, China, indicates that although most hospitals have a relatively high efficiency, a few are extremely low in efficiency scores. This study helps decision makers identify the areas where the inefficiency lies and hospitals can improve their respective service. It also suggests how to efficiently allocate and make full use of resources.