Technical efficiency of public district hospitals in Bangladesh: a data envelopment analysis

District hospitals (DHs) provide secondary level of healthcare to a wide range of population in Bangladesh. Efficient utilization of resources in these secondary hospitals is essential for delivering health services at a lower cost. Therefore, we aimed to estimate the technical efficiency of the DHs in Bangladesh.

We used input-oriented data envelopment analysis method to estimate the variable returns to scale (VRS) and constant returns to scale (CRS) technical efficiency of the DHs using data from Local Health Bulletin, 2015. In this model, we considered workforce as well as number of inpatient beds as input variables and number of inpatient, outpatient, and maternal services provided by the DHs as output variables. A Tobit regression model was applied for assessing the association of institutional and environmental characteristics with the technical efficiency scores.

The average scale, VRS, and CRS technical efficiency of the DHs were estimated to 85%, 92%, and 79% respectively. Population size, poverty headcount, bed occupancy ratio, administrative divisions were significantly associated with the technical efficiency of the DHs. The mean VRS and CRS technical efficiency demonstrated that the DHs, on an average, could reduce their input mix by 8% and 21% respectively while maintaining the same level of output.

Since the average technical efficiency of the DHs was 79%, there is little scope for overall improvements in these facilities by adjusting inputs. Therefore, we recommend to invest further in the DHs for improvement of services. The Ministry of Health and Family Welfare (MoHFW) should improve the efficiency in resource allocation by setting an input-mix formula for DHs considering health and socio-economic indicators (e.g., population density, poverty, bed occupancy ratio). The formula can be designed by learning from the input mix in the more efficient DHs. The MoHFW should conduct this kind of benchmarking study regularly to assess the efficiency level of health facilities which may contribute to reduce the wastage of resources and consequently to provide more affordable and accessible public hospital care.