Hospital efficiency and utilization of high-technology medical equipment: A panel data analysis

Abstract

The association between hospital characteristics and utilization of high-tech medical equipment has received more attention for its complicated consequences on health care costs and quality. This study aims to take a step further by focusing on the relationship between hospital efficiency and utilization of Computed Tomography (CT) and Magnetic Resonance Imaging (MRI). We selected a random sample of 131 hospitals, and conducted a questionnaire survey in each of the sampled hospitals in 2009–2013. We first estimated hospital cost inefficiency scores through stochastic frontier analysis. Then, we examined how the scores as well as population, GDP, hospital volume, annual number of surgical cases and hospital beds were associated with CT and MRI utilization rates through a series of linear regression models with hospital-level fixed effect. We also conducted a series of sensitivity checks to estimate the inefficiency scores or applying different time-lags to the scores in the regression models. The descriptive and regression analysis revealed a positive and significant association between the scores and CT (P< 0.01) or MRI (P< 0.05) utilization rate. Regarding other covariates, hospital volume, annual number of surgical cases were significantly associated with CT (P< 0.05), not MRI (P> 0.05) utilization rate. The sensitivity checks confirmed the robustness of the results. Utilization of CT and MRI increased with hospital cost inefficiency. The finding has important policy implication for the ongoing hospital reform in China.