Assessing Productivity Development of Public Hospitals: A Case Study of Shanghai, China

As the main provider of medical services for the general public, the productivity changes of public hospitals directly reflect the development of the healthcare system and the implementation effect of medical reform policies. Using the dataset of 126 public hospitals in China from 2013 to 2018, this paper improves the existing literature in both index selection and model formulation, and examines public hospitals' total factor productivity (TFP) growth. Empirical results not only demonstrate the trend of productivity development but also point out the directions in how to improve the current running status. Our study demonstrates that there were no obvious productivity fluctuations in public hospitals during the recent observing years, indicating that the performance of China's public health system was generally acceptable in coping with fast-growing medical demand. However, the effect of public hospital reform has not been remarkably shown; thus, no significant productivity improvement was observed in most hospitals. Tertiary hospitals witnessed a slight declining trend in TFP, while secondary hospitals showed signs of rising TFP. To effectively enhance the overall performance of public hospitals in China, practical suggestions are proposed from the government and hospital levels to further promote the graded medical treatment system.