Technological and Efficiency Change of Private Hospitals in Tanzania: Does the Size Matter?

This study measures productivity of private hospitals in Tanzania based on the hospitals size. Specifically, the study aims at evaluating technological change and efficiency change based on hospitals’ size. The study also focuses on exploring factors deriving productivity in relation to hospitals size. The study employs Malmquist productivity index (MPI) to measure and decompose productivity growth into efficiency change and technological change in relations to the hospitals size. The study used secondary data extracted from annual report of 34 private hospitals for the period ranging from 20018/19 to 2021/22. Results show that small (0≤beds≤150) and large hospitals (250≥beds) were experiencing productivity progress (improvement) while medium hospitals (151≤beds≤250) were experiencing regress over the study period. Analysis indicates that progress or regress of the hospitals was largely influenced by technical efficiency change which implies embracing or failure to embrace advanced technology, quality healthcare services, best management practices as well as investing in new operating methodologies. Large hospitals experienced deterioration in the productivity growth in year one as well as year two followed by a slight improvement in the subsequent two years. This study contributes quite relevant information for hospitals administrators and hospitals’ owners as well as policy makers to make informed decision in the course of improving performance of private hospitals in Tanzania. The study also provides further guides on the efficiency utilization of the hospitals assets since the analysis is based on the size and what determine hospitals’ productivity.