Does Efficiency Drive Hospital Value? Evidence from Indonesia

HRMARS - A paradigm shift now frames hospital value as a composite of quality, efficiency, and sustainability rather than financial performance alone. Yet evidence on how sustainability-oriented inputs are converted into value remains fragmented and contradictory, especially in hospitals of emerging economies. This study examines whether efficiency mediates the effects of green finance and excellent service quality on hospital value in fully accredited Indonesian hospitals. This quantitative-explanatory study surveyed 322 managerial respondents from a population of 1,590 individuals across fully accredited (“paripurna”) hospitals in Lamongan Regency, using a five-point Likert questionnaire. Data were analysed with Partial Least Squares–Structural Equation Modeling (PLS-SEM) in SmartPLS, covering measurement-model and structural-model evaluation and mediation testing via 5,000-subsample bootstrapping. Green finance (? = 0.171; p = 0.009) and excellent service quality (? = 0.164; p = 0.003) positively affected efficiency; efficiency positively affected hospital value (? = 0.112; p = 0.018). Both inputs also directly affected value (? = 0.129 and ? = 0.195; p < 0.01). The model explained 79.4% of the variance in hospital value (R² = 0.794). Efficiency mediated both relationships. Efficiency is the key pathway transforming green finance and service excellence into hospital value. The findings extend RBV and VBHC and offer actionable guidance for hospital management in emerging economies.