Efficiency Comparison of Public and Private Hospitals before and after the COVID-19 Pandemic: The Case of Hubei, China

AbstractBackgroundThe persistence and spread of the COVID-19 pandemic adversely affected the efficiency of hospitals with different ownership. This article aims to compare the differences and changes in technical efficiency of public and private hospitals before and after the pandemic.MethodsWe collected institutional and operational data for all 519 general hospitals (including 243 public and 356 private hospitals) in Hubei province China from 2019 to 2021. Using the slacks-based measure model (SBM), we measured and compared technical efficiency. The effect of the pandemic on hospital efficiency was examined with a two-way fixed effect model and a lasso regression model. PSM, Tobit regression was used for robustness testing.ResultsPublic hospitals were much more efficient than private hospitals both before and after the epidemic in Hubei. The mean efficiency score of public and private hospitals was 0.52 and 0.26 in 2019, 0.37 and 0.22 in 2020, 0.44 and 0.24 in 2021. The difference in efficiency between public and private hospitals was significant in 2019 and 2021(p<0.001). Public hospital efficiency showed a faster recovery in the face of the epidemic.ConclusionsPublic hospitals run by the administrative system have shown greater efficiency and played a major role in the fight against the pandemic. The country's public health protection network should be fortified and efforts should be made to promote the high-quality development of public hospitals. The widening of the overall gap between public and private hospitals appeared. In the post-epidemic era, private hospitals need to prioritize finding the right positioning and offering highly specific medical services in China.