Optimizing efficiency in Tanzanian public hospitals through improved productivity and resource utilization

Efficient healthcare delivery is crucial for achieving optimal health outcomes, particularly in developing countries facing resource allocation challenges. This study evaluates regional healthcare efficiency in Tanzania using Data Envelopment Analysis (DEA) with data from 2017 to 2021, employing both Constant Returns to Scale (CRS) and Variable Returns to Scale (VRS) methods and analyzing productivity trends through the Malmquist Productivity Index (MPI). The results indicate an average scale efficiency of 56.8%, with Dar es Salaam, Morogoro, Kilimanjaro, Arusha, and Tanga achieving full efficiency, while Ruvuma (26.7%) and Mtwara (28%) were the least efficient, highlighting significant regional disparities. CRS technical efficiency averaged 48.5%, implying a 51.5% input savings potential, while VRS technical efficiency averaged 82.3%, suggesting a 17.7% input savings potential. Additionally, only 19.23% of regions were efficient under CRS, and 30.77% under VRS. The MPI results showed that low technical change, with an average of 0.822, was a key driver of inefficiency despite a 2.063 average pure efficiency change, indicating poor technological progress. Further analysis of returns to scale found that 69.24% of regions operated under Increasing Returns to Scale (IRS), suggesting underutilization of resources, while 11.53% experienced Decreasing Returns to Scale (DRS), signaling inefficiencies from overextension. Recommendations to address these inefficiencies include targeted resource redistribution, improving healthcare worker conditions, staff capacity building, health information system integration, performance-based incentives, and fostering public–private partnerships to enhance service delivery and efficiency. Additionally, evidence-based decision-making frameworks and strong performance monitoring systems should guide reforms, promoting a more equitable and efficient healthcare system in Tanzania and many other developing countries.