This study evaluates the operational efficiency of district hospitals in Rwanda, focusing on their systems and cost-effectiveness. A multilevel regression analysis was employed using data from multiple districts to evaluate system efficiency. The model incorporates district-level and hospital-level factors affecting costs and outcomes. The analysis revealed that hospital bed occupancy rates were significantly associated with cost-effectiveness, with a coefficient of -0.56 (95% CI: -1.23 to 0.11). The multilevel regression model demonstrated the importance of bed utilization in determining cost-effectiveness among district hospitals. District health authorities should focus on optimising hospital bed occupancy rates to improve their operational efficiency and reduce costs while maintaining quality care standards. Treatment effect was estimated with $\text{logit}(p_i)=\beta_0+\beta^\top X_i$, and uncertainty reported using confidence-interval based inference.