Measuring Private Hospital Performance in Nepal: A Parametric Approach

This study will explore the relationship between the management practices and performance of private hospitals in Nepal. While much literature on the drivers of hospital efficiency in developed countries has already been produced, only few studies exist on this topic in the context of conflict-affected, low-income countries. Further, academic economists have only recently started paying attention to management practices and their influence on firm productivity, and data on this research question is scarce. This project will attempt to address both of these limitations of the existing literature by collecting data on the management practices of private hospitals in Nepal and estimating the impact of these practices on hospital efficiency and performance.

The data will be collected via primary survey of 70 private hospitals across the country. The study will adapt an in-depth survey methodology developed by Bloom and Van Reenen (2007) to build a ‘management score’ for each hospital. This entails scoring 18 key practices that fall under four sub-categories: operations, monitoring, targets, and people management. Among other precautions to ensure that the data is as accurately measured as possible, manager interviews will be administered and scored by two independent interviewers in order to reduce interviewer bias. Hospital performance will be measured by the number of outpatient visits, bed turnover, waiting time and financial performance.

This study will contribute to our better understanding of the determinants of productivity in medium firms in conflict-affected, low-income countries. Its findings are also likely to be directly relevant for policy. The Nepalese government has recently been working on strategies to encourage private sector involvement in the provision of healthcare services, and a large number of private health providers have been entering the market in recent years. Results on the quality of management services and the productive efficiency of private hospitals could thus be useful for the evaluation and potential refinement of such policies.


Shiva Raj Adhikari

Tribhuvan University