Assessing the performance of non-specialised private hospitals in Malaysia - an upper-middle-income medical tourism destination country using the Pabón-Lasso model

BACKGROUND: The government has rapidly promoted the privatisation of healthcare to improve systemic performance, based on the theory that markets improve efficiency. This study aims to measure the efficiency of private hospitals following their expansion and venture into the medical tourism industry through extensive governmental support.

METHODS: Inpatient utilisation of 101 private, non-specialised hospitals in Malaysia in 2014 and 2018 from the Health Informatics Centre, Ministry of Health Malaysia database was studied using paired samples t-test, analysis of variance (ANOVA), and the Pabón-Lasso model.

RESULTS: Better quantitative performance was found among larger hospitals, those with hospital accreditation, and those participating in medical tourism activities. There is a scale effect of efficiency between smaller and larger hospitals. However, when compared within respective size categories, Category 1 (small hospitals with less than 100 beds) has the highest percentage of efficient hospitals (39.3 per cent in 2014 and 35.7 per cent in 2018 in Sector 3 of the Pabón Lasso graphs).

CONCLUSION: This study has found that a higher bed occupancy rate (BOR) and longer average length of stay (ALoS) are associated with larger private hospitals, hospital accreditation, and participation in medical tourism activities in Malaysia. There is a need to expedite strategic hospitals partnership for resource optimisation and capacity pooling towards producing better performance.