Objective To analyze the dynamic efficiency of township hospitals. Methods Based on the DEA-Malmquist index, this research analyzed the change of the total factor productivity indices and the decomposition items of 281 township hospitals in Hunan province with panel data from 2000 to 2008. Results Among 281 township hospitals, less than half increased their scale efficiency, while more than half increased their total factor productivity, technology, whole efficiency and technical efficiency. Increasing technology and whole efficiency was the best way to improve total factor productivity. Besides, increasing technical efficiency and scale efficiency was the best way to improve whole efficiency. Conclusions The improvement of scale efficiency is key to developing the central township hospitals, while the improvement of technology is the key to developing general township hospitals.
