District hospitals in Tanzania are crucial for healthcare delivery but face challenges in resource management. The study employs a two-stage least squares (2SLS) regression model to estimate efficiency gains across districts. Uncertainty is addressed using robust standard errors. Panel-data analysis revealed significant variations in hospital efficiency, with some districts showing substantial improvements over the study period. Efficiency gains were particularly notable in districts implementing targeted resource allocation strategies. District hospitals should prioritise resource optimization and quality improvement initiatives to enhance service delivery effectiveness. Panel data analysis, hospital efficiency, district healthcare systems, Tanzania Treatment effect was estimated with $\text{logit}(p_i)=\beta_0+\beta^\top X_i$, and uncertainty reported using confidence-interval based inference.