Background The ‘public versus private healthcare’ debate has never stopped, and the empirical evidence is inconclusive and limited in developing countries. This study tries to examine the impacts of delivery structure on the efficiency of healthcare services as well as whether the impacts vary among markets with different characteristics in China. Methods We use panel data at China’s provincial level from 2010 to 2019, and conduct a DEA-Tobit model to investigate the impacts. More concretely, first we apply a DEA model to calculate the efficiency of healthcare services, then examine the impacts of delivery structure on it with a Tobit model. Results Our results indicate that after considering the factors of service quality in the outputs of healthcare services, the efficiency of healthcare services decreased by 20.47% since 2010 because of the overuse of healthcare services and blind expansion of hospitals. However, the large entry of private hospitals does have a significantly positive impact on the efficiency, because the competition pressure pushes them to reduce costs. Moreover, this effect is more effective in the market of primary care which social capital mainly enter. Conclusions This study provides new and reliable evidence on the positive effects of absorbing private capital into the healthcare market, which provides beneficial implications for China and other developing countries to promote and improve market-oriented reform of healthcare services.