Use of the stochastic frontier cost model in the technical efficiency evaluation of TCM hospitals

Objective To analyze the present situation of technical efficiency in TCM hospitals throughout the country, discuss the influencing factors causing inefficiency and propose corresponding suggestions. Methods The technical efficiency in 60 TCM hospitals in the country was analyzed using the stochastic frontier cost model for panel data and the influencing factors causing inefficiency were discussed using the multiple stepwise regression method. Results The average technical inefficiency was 22.59% and inefficiency showed an upward trend as the areas shifted from the eastern through the middle to the western regions. Five factors, including the utility rate of beds and the proportion of health technicians among the entire hospital staff, were statistically significant so far as the effect on the increase of the overall cost was concerned. Conclusion The stochastic frontier cost model for panel data is the best method for evaluating the technical efficiency in TCM hospitals. On the basis of the above analysis, suggestions for strengthening scientific management, improving the utility rate of resources and reducing unnecessary waste are put forward.