Measuring hospital efficiency in China using grey relational analysis and data envelopment analysis

In this paper, the relative efficiencies of 24 general hospitals in China's Shaanxi province are measured using data envelopment analysis (DEA). Grey relational analysis (GRA) is applied to group the initial measuring indicators and to select the representative ones. Three output variables including the number of discharges, utilization times of beds, and average stay days, and two input variables including the number of beds and average medical expenses per day are considered in the analysis. The results of the overall technical efficiency scores, the pure technical efficiency scores, and the scale efficiency scores of sample hospitals provide some useful managerial insights into measurement and improvement of hospital performance in China.