How slack resource affects hospital financial performance: The evidence from public hospitals in Beijing

Abstract

BackgroundBeijing is a city with high concentration and congestion of quality medical resources in China. While moderate slack seems to be beneficial to the improvement of medical quality. The actual relationship between hospital slack resources and their performance deserves further exploration. The study aims to analyze the slack resources of public hospitals in Beijing and investigate the relationship between slack and hospital financial performance. Finding a reasonable range of slack to optimize resource allocation.MethodsThe panel data of 22 public hospitals in Beijing from 2005 to 2011 were selected as the sample, and the DEA model was applied to measure the main variable using DEAP 2.1. Descriptive statistical analysis was performed using Excel and STATA 15. Pearson correlation coefficient analysis and variance inflation factor test were performed for each variable to avoid multicollinearity. The HAUSMAN test was used to determine the appropriate panel regression model, and then to analyze the influence relationship between the variables.ResultsFrom 2005 to 2011, hospital slack resource transitioned from high to low. The slack measured by the DEA model has an inverted U-shaped relationship with financial performance, with ROA increasing from 4.088 to 8.083 when slack increases from 0 to about 0.378, and then showing a decreasing trend; slack measured by financial indicators has a transposed S-shaped relationship with financial performance, with ROA increasing when slack increase from 3.772 to 5.933.ConclusionsThe slack resources of Beijing public hospitals decreased year by year from 2005 to 2011. Moderate slack resources are conducive to the improvement of healthcare quality, but when slack resources increase to a certain level, it will have a negative impact on healthcare quality. Therefore, hospital managers should control the slack within a moderate range according to the hospital operation policy and development plan to obtain the best performance.

Firm Performance and Corporate Social Responsibility: Spatial Context and Effect Mechanism

“…To some extent, slack resources are conducive to the improvement of financial performance (C. Chen et al, 2022). The better a company's financial performance, the more willing it is to spend on CSR (Nguyen et al, 2020).…”

“…To some extent, slack resources are conducive to the improvement of financial performance (C. Chen et al, 2022).…”

Intrinsic drive of medical staff: a survey of employee representatives from 22 hospitals in China

“…The specificity of these hospital administrations and the particular geographical features of Beijing may have led to a biased selection of respondents that is not reflective of all medical staff. While prior studies of the same 22 hospitals have shown that this selection is feasible and scientific ( Chen et al, 2022 ) and the large sample size of >2,000 respondents helped to increase the representativeness of the current study, potential bias cannot be ruled out. Subsequent studies will need to include primary care institutions, other hospital types, and additional geographic areas, to gain a more comprehensive understanding of the ID of medical staff.…”