Technical efficiency of sub-district level hospitals in Bangladesh: a comparative frontier analysis

In Bangladesh, sub-district hospitals (SDHs) are the first referral point for inpatient primary healthcare (PHC) services of the public providers in both rural and municipal corporation areas. These facilities also provide both outpatient and emergency healthcare services to the population at a minimum user fee. The efficient use of resources in primary-level healthcare facilities is essential for delivering quality healthcare services. Therefore, our aim was to estimate the technical efficiency (TE) of the SDHs in Bangladesh. We used an output-oriented data envelopment analysis (DEA) method to estimate the variable returns to scale (VRS) and constant returns to scale (CRS) TE of a total of 423 SDHs using data from the Local Health Bulletin -2017. To measure TE, we used workforce and inpatient beds as inputs and the number of inpatients and outpatients served by the hospitals in a month as output. We applied the Simar and Wilson model to find how the other internal and external characteristics of these hospitals influenced estimated TE score. We compared our DEA results with stochastic frontier analysis (SFA) and performed sensitivity analysis. The average VRS and CRS TE of the SDHs were estimated to be 58.9% and 53.4%, respectively. Of the 423 SDHs, 15 were fully efficient in CRS, 30 were in VRS and 60 were scale efficient, while the rest operated below the efficiency frontier. The population density per bed, ratios of bed occupancy, ratios of beds to physicians, ratios of physicians to nurses, and administrative division had a significant positive influence, while lengths of stay and ratios of beds to nurses had a significant negative influence on the SDHs efficiency scores. The mean TE demonstrated that the SDHs, on an average, could improve their output by 42% using the existing level of input mix. The results were consistent in the sensitivity analysis. The average TE of the SDHs was half of the best score, suggesting there is scope for overall improvement among the inefficient SDHs by learning from the efficient SDHs. The Ministry of Health and Family Welfare (MOHFW) of Bangladesh allocates resources to SDHs based on the number of beds rather than based on an assessment of needs. The MOHFW could improve its monitoring system to investigate why some facilities are performing well using similar resources while others do not and adjust the allocation system to take into account the quantity and quality of care.