The European Journal of Health Economics

, Volume 14, Issue 2, pp 253–265 | Cite as

Determinants of healthcare system’s efficiency in OECD countries

  • Sharon Hadad
  • Yossi Hadad
  • Tzahit Simon-TuvalEmail author
Original Paper



Firstly, to compare healthcare systems’ efficiency (HSE) using two models: one incorporating mostly inputs that are considered to be within the discretionary control of the healthcare system (i.e., physicians’ density, inpatient bed density, and health expenditure), and another, including mostly inputs beyond healthcare systems’ control (i.e., GDP, fruit and vegetables consumption, and health expenditure). Secondly, analyze whether institutional arrangements, population behavior, and socioeconomic or environmental determinants are associated with HSE.


Data envelopment analysis (DEA) was utilized to calculate OECD countries’ HSE. Life expectancy and infant survival rate were considered as outputs in both models. Healthcare systems’ rankings according to the super-efficiency and the cross-efficiency ranking methods were used to analyze determinants associated with efficiency.


(1) Healthcare systems in nine countries with large and stable economies were defined as efficient in model I, but were found to be inefficient in model II; (2) Gatekeeping and the presence of multiple insurers were associated with a lower efficiency; and (3) The association between socioeconomic and environmental indicators was found to be ambiguous.


Countries striving to improve their HSE should aim to impact population behavior and welfare rather than only ensure adequate medical care. In addition, they may consider avoiding specific institutional arrangements, namely gatekeeping and the presence of multiple insurers. Finally, the ambiguous association found between socioeconomic and environmental indicators, and a country’s HSE necessitates caution when interpreting different ranking techniques in a cross-country efficiency evaluation and needs further exploration.


Healthcare system efficiency (HSE) Data envelopment analysis (DEA) Ranking methods OECD countries 
JEL Classification I12 I18 C14 



The authors would like to express gratitude for the contribution of The European Journal of Health Economics anonymous referees for their constructive and helpful comments to the paper. Their comments and remarks truly assisted in enhancing the readability and the quality of this paper.


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Copyright information

© Springer-Verlag 2011

Authors and Affiliations

  1. 1.Department of Industrial Engineering and ManagementShamoon College of EngineeringBeer-ShevaIsrael
  2. 2.Department of Health Systems ManagementGuilford Glazer Faculty of Business and Management, Ben-Gurion University of the NegevBeer-ShevaIsrael

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