Application of the random front cost function method in assessing the commercial efficiency of hospitals

Objective The method of random front cost function was used in assessing the commercial efficiency of hospitals in order to provide reference for hospitals to find the causes of inefficiency and for departments concerned to formulate policies. Methods A random cost function model was built by means of data from hospitals at county level and above in Weihai. Results The average inefficiency of hospitals at county level and above in Weihai was 8.51%, with the highest reaching 24.5%. The hospitals cost of idleness expenditures brought about by inefficiency averaged 1,222,700 yuan. The cause of inefficiency lied in the irrational cost structure of the hospitals and their cost of idleness expenditures to varying degrees. Conclusion Compared with other methods of assessing commercial efficiency, the method of random front cost function, which is comprehensive in nature, can not only reflect the general commercial efficiency of hospitals in a certain region, but also assess the relative efficiency level of each hospital. It can also directly indicate the extent of losses brought to hospitals by inefficiency.