Selective strategic adaptation and structural trade-offs in a public traditional Chinese medicine hospital under China's national performance appraisal: a longitudinal study

Background Since 2019, China's National Performance Appraisal (NPA) has guided tertiary public hospitals from scale-oriented expansion toward high-quality development. While its impact on general hospitals has been widely discussed, the adaptation strategies of traditional Chinese medicine (TCM) hospitals, which face the dual constraints of modernization and traditional preservation, remain underexplored. This study draws on institutional theory, resource dependence theory, and agency theory to evaluate the longitudinal impact of the NPA on a Grade-A tertiary TCM orthopedic hospital during the post-pandemic recovery period. Methods A single-center retrospective observational study was conducted using longitudinal data from 2019 to 2024 and selected key performance indicators across four NPA dimensions: medical quality, efficiency, sustainability, and satisfaction. Grey relational analysis was used to identify weighted drivers of development, while Spearman's rank correlation analysis was used to assess the potential crowding-out relationship in resource allocation. Results The hospital demonstrated selective strategic adaptation under layered reform pressures. While core clinical safety indicators remained stable and competitive, several high-weight indicators showed a marked 2024 step-change. TCM decoction piece usage rose to 17.74% in 2024, moving from consistently below the annual national peer median during 2019–2023 to slightly above the 2024 median (17.74% vs. 16.49%), suggesting threshold-crossing catch-up with strategic differentiation. Research funding per 100 health professionals also increased by 115%. Together, these changes likely reflected the convergence of post-pandemic recovery, strategic realignment under the NPA, and broader reform pressures. Spearman analysis showed a moderate inverse association between the debt-to-asset ratio and the personnel expenditure ratio ( r s = − 0.486 , p = 0.329 ) , suggesting a crowding-out tendency, although the limited number of annual observations precludes strong statistical inference. Conclusion The NPA appears to have contributed to a strategic shift toward research intensity and stronger TCM-characteristic performance, but the 2024 acceleration should be interpreted within the combined context of post-pandemic recovery and layered reform pressures. This apparent success remains financially precarious because it relies on a structural trade-off in which high leverage coexists with persistently constrained personnel investment. Sustainable development will require policy adjustments that better balance performance scoring, financial resilience, and human capital investment.