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An approach toward public hospital performance assessment

Nwagbara, Vitalis Chukwudi MDa; Rasiah, Rajah DPhilb,*; Aslam, Md. Mia PhDc

Section Editor(s): Adesina., Adebowale

doi: 10.1097/MD.0000000000004688
Research Article: Economic Evaluation Study: PDF Only

Background: Public hospitals have come under heavy scrutiny across the world owing to rising expenditures. However, much of the focus has been on cutting down costs to raise efficiency levels. Although not denying the importance of efficiency measures, this article targets a performance issue that is relevant to address the quality of services rendered in public hospitals. Thus, it is important to focus on the effectiveness of resource utilization in these hospitals. Consequently, this article seeks to examine the impact of average length of stay (ALOS) and bed turnover rates (BTR) on bed occupancy rates (BOR).

Methods: Public hospital inpatient utilization records during the period 2006 to 2013 were gathered from the Ministry of Health, Malaysia. A 2-step generalized method of moments (GMM) statistical method was used to analyze the data. BOR was adopted as the dependent variable, whereas BTR and ALOS were used as the explanatory variables. The logarithm of total bed count (BED), admission (ADM), and patient days (PD) was deployed as control variables. Three regression models were developed to explore the correlates of BOR as a hospital performance measure. Ethics committee approval was waived because no patients were identified in the study.

Results: The statistical analyses show that ALOS and BTR are inversely correlated with BOR, with both coefficients significant at 1%. The control variables of BED, ADM, and PD had the right positive signs and they were significant in both sets of equations. Hence, reducing ALOS and BTR can help raise performance of public hospitals in Malaysia.

Conclusion: In light of the robust results obtained, this study offers implications for improving public hospital performance. It shows a need to reduce ALOS and BTR in public hospitals to improve BOR.

aInstitute of Graduate Studies

bDepartment of Development Studies

cDepartment of Economics, University of Malaya, Kuala Lumpur, Malaysia.

Correspondence: Rajah Rasiah, Department of Development Studies, University of Malaya, 50603 Kuala Lumpur, Malaysia (e-mail:

Abbreviations: ADM = admissions, ALOS = average length of stay, BOR = bed occupancy rate, BTR = bed turnover rate, GMM = generalized method of moments, MOH = Ministry of Health, PD = patient days.

Funding: The authors wish to acknowledge the generous funding provided by the Ministry of Higher Education, Malaysia (MOHE) through its High Impact Research Grant (UM.C/625/1/HIR/MOE/ASH/05).

Disclosure: The authors declare no potential conflicts of interest with respect to the research, authorship, and/or publication of this paper.

This is an open access article distributed under the Creative Commons Attribution License 4.0 (CCBY), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Received December 29, 2015

Received in revised form July 12, 2016

Accepted August 3, 2016

Copyright © 2016 The Authors. Published by Wolters Kluwer Health, Inc. All rights reserved.