Evaluating the impact of COVID-19 on hospital efficiency: A stochastic distance function analysis of Japan’s National Hospital Organization

Background: This study seeks to provide insights into the factors that influence hospital performance during health crises to propose strategies for improving operational efficiency in future public health emergencies. It measures efficiency in national hospitals in Japan using a stochastic distance function approach on data from before and after the COVID-19 pandemic.Methods: We collected data for financial years 2017, 2018, 2020, and 2021 (before and after the COVID-19 pandemic) related to the National Hospital Organization. The number of physicians, nurses, and others (including co-medical staff); the sum of costs; and the number of beds were used as input variables. The total numbers of inpatients and outpatients per year were used as output variables. The dataset comprised 140 national hospitals and spanned four years, resulting in 280 hospital observations pre- and post-COVID-19.Results: The average number of inpatients at each hospital during the observation period was 109,141.5 (standard deviation [SD] = 37077.7), and the average number of outpatients was 84,324.5 (SD = 75050.4). The average numbers of physicians, nurses, others, beds, and costs were 46.9 (SD = 41.5), 62.6 (SD = 38.1), 278.7 (SD = 143.9), 363.5 (SD = 124.2), and 249,409,614.3 (SD = 2366015803.0), respectively. In the pre- and post-pandemic periods, the outpatient/inpatient coefficients were significant and positive, suggesting that the progression of COVID-19 led to a decrease in hospital efficiency.Conclusions: While this study cannot definitively explain the efficiency decline, it provides important evidence indicating that the COVID-19 pandemic adversely affected hospital operations and revenue in Japan.