Estimation Production Function of Inpatient Services and Input Productivity: A Cross-Sectional Study of Iran Selected Public Hospitals

Optimal allocation of resources commensurate with performance improvement is the concerns of all countries including Iran. Estimation hospitals production function is important in the economic management of hospitals. The aim of this study was to estimate the production function of Iranian selected public hospitals as well as analyze the economic behavior in use of hospital resources. The study was conducted by using the input data of 67 Iranian selected public hospitals at 2013. In this study, expected production level of hospitals and marginal productivity of inputs were calculated by regression estimation of Cobb-Douglas production function. The results showed that a 10% increase in net working hours of specialized human resources in public hospitals would cause 8.8% increase in average production level of inpatient services. Moreover, 10% increase of active beds would cause 1.1% increase in average production level of inpatient services in the studied hospitals. Also, the production levels in 40% of hospitals were lower than the average expected production level and did not have full performance. With the proper utilization of human resources and beds, production level in a significant number of hospitals can be improved.