Advertisement

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

Abstract

Objective

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.

Design

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.

Results

(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.

Conclusions

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.

Keywords

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

Notes

Acknowledgments

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.

References

  1. 1.
    Martín, J.J.M., del Amo González, M.P.L., García, M.D.C.: Review of the literature on the determinants of healthcare expenditure. Appl. Econ. 43, 19–46 (2011)CrossRefGoogle Scholar
  2. 2.
    OECD. OECD Health Data: health expenditure and financing, OECD Health Statistics (database). (2010)Google Scholar
  3. 3.
    Duncan, G.J., Daly, M.C., McDonough, P., Williams, D.R.: Optimal indicators of socioeconomic status for health research. Am. J. Public Health 92, 1151–1157 (2002)PubMedCrossRefGoogle Scholar
  4. 4.
    Lahelma, E., Martikainen, P., Laaksonen, M., Aittomäki, A.: Pathways between socioeconomic determinants of health. J. Epidemiol. Community Health 58, 327–332 (2004)PubMedCrossRefGoogle Scholar
  5. 5.
    Spinks, J., Hollingsworth, B.: Cross-country comparisons of technical efficiency of health production: a demonstration of pitfalls. Appl. Econ. 41, 417–427 (2009)CrossRefGoogle Scholar
  6. 6.
    Williams, A.: Science or marketing at WHO? A commentary on ‘World Health 2000’. Health Econ. 10, 93–100 (2001)PubMedCrossRefGoogle Scholar
  7. 7.
    Richardson, J., Wildman, J., Robertson, I.K.: A critique of the World Health Organisation’s evaluation of health system performance. Health Econ. 12, 355–366 (2003)PubMedCrossRefGoogle Scholar
  8. 8.
    Smith, P.C., Street, A.: Measuring the efficiency of public services: the limits of analysis. J. R. Stat. Soc. A Stat. 168, 401–417 (2005)CrossRefGoogle Scholar
  9. 9.
    Simpson, H.: Productivity in public services. J Econ Surv 23, 250–276 (2009)CrossRefGoogle Scholar
  10. 10.
    Hollingsworth, B.: The measurement of efficiency and productivity of health care delivery. Health Econ. 17, 1107–1128 (2008)PubMedCrossRefGoogle Scholar
  11. 11.
    Hollingsworth, B.: Non-parametric and parametric applications measuring efficiency in health care. Health Care Manag. Sci. 6, 203–218 (2003)PubMedCrossRefGoogle Scholar
  12. 12.
    Hadad, Y., Ben-Yair, A., Friedman, L., Sinuany-Stern, Z.: Measuring efficiency of hospitals using the data envelopment analysis model: an application for ranking Israeli hospitals. Commun Dependability Qual. Manag. 9, 22–31 (2006)Google Scholar
  13. 13.
    Barros, C.P., Gomes de Menezes, A., Peypoch, N., Solonandrasana, B., Vieira, J.C.: An analysis of hospital efficiency and productivity growth using the Luenberger indicator. Health Care Manag. Sci. 11, 373–381 (2008)PubMedCrossRefGoogle Scholar
  14. 14.
    Chernichovsky, D., Friedman, L., Sinuany-Stern, Z., Hadad, Y.: The efficiency of general hospitals in Israel according Data Envelope Analysis. Econ. Q. 56, 119–139 (2009)Google Scholar
  15. 15.
    Dimas, G., Goula, A., Soulis, S.: Productive performance and its components in Greek public hospitals. Oper. Res. (2010). doi: 10.1007/s12351-010-0082-2
  16. 16.
    Schwellnus, C.: Achieving higher performance: enhancing spending efficiency in health and education in Mexico. OECD Economics Department Working Papers, No. 732. (2009). doi: 10.1787/220731242856
  17. 17.
    Economou, C., Giorno, C.: Improving the performance of the public health care system in Greece. OECD Economics Department Working Papers, No. 722. (2009). doi: 10.1787/221250170007
  18. 18.
    Retzlaff-Roberts, D., Chang, C.F., Rubin, R.M.: Technical efficiency in the use of health care resources: a comparison of OECD countries. Health Policy 69, 55–72 (2004)PubMedCrossRefGoogle Scholar
  19. 19.
    Bhat, V.N.: Institutional arrangements and efficiency of health care delivery systems. Eur. J. Health Econ. 6, 215–222 (2005)PubMedCrossRefGoogle Scholar
  20. 20.
    Afonso, A., St Aubyn, M.: Non-parametric approaches to education and health efficiency in OECD countries. J. Appl. Econ. 8, 227–246 (2005)Google Scholar
  21. 21.
    Farrell, M.J.: The measurement of productive efficiency. J. R. Stat. Soc. A Stat. 120, 253–290 (1957)CrossRefGoogle Scholar
  22. 22.
    Cooper, W.W., Tone, K.: Measures of inefficiency in data envelopment analysis and stochastic frontier estimation. Eur. J. Oper. Res. 99, 72–88 (1997)CrossRefGoogle Scholar
  23. 23.
    Charnes, A., Cooper, W., Rhodes, E.: Measuring the efficiency of decision making units. Eur. J. Oper. Res. 2, 429–444 (1978)CrossRefGoogle Scholar
  24. 24.
    Seiford, L.M., Thrall, R.M.: Recent developments in DEA: the mathematical programming approach to frontier analysis. J. Econ. 46, 7–38 (1990)Google Scholar
  25. 25.
    Banker, R.D., Charnes, A., Cooper, W.W.: Some models for estimating technical and scale inefficiencies in data envelopment analysis. Manage. Sci. 30, 1078–1092 (1984)CrossRefGoogle Scholar
  26. 26.
    Culyer, A.J., Wagstaff, A.: Equity and equality in health and health care. J. Health Econ. 12, 431–457 (1993)PubMedCrossRefGoogle Scholar
  27. 27.
    Hollingsworth, B., Wildman, J.: The efficiency of health production: re‐estimating the WHO panel data using parametric and non‐parametric approaches to provide additional information. Health Econ. 12, 493–504 (2003)PubMedCrossRefGoogle Scholar
  28. 28.
    Sueyoshi, T.: DEA-discriminant analysis in the view of goal programming. Eur. J. Oper. Res. 115, 564–582 (1999)CrossRefGoogle Scholar
  29. 29.
    Sueyoshi, T., Goto, M.: Slack-adjusted DEA for time series analysis: Performance measurement of Japanese electric power generation industry in 1984–1993. Eur. J. Oper. Res. 133, 232–259 (2001)CrossRefGoogle Scholar
  30. 30.
    Andersen, P., Petersen, N.C.: A procedure for ranking efficient units in data envelopment analysis. Manage. Sci. 39, 1261–1264 (1993)CrossRefGoogle Scholar
  31. 31.
    Sexton, T.R., Silkman, R.H., Hogan, A.J.: Data envelopment analysis: critique and extensions. In: Silkman, R.H. (ed.) Measuring Efficiency: An Assessment of Data Envelopment Analysis, pp. 73–105. Jossey-Bass, San Francisco (1986)Google Scholar
  32. 32.
    United Nations Statistics Division: Social Indicators. Available at http://unstats.un.org/unsd/demographic/products/socind/health.htm Accessed 8 August 2011
  33. 33.
    Starfield, B.: Health services research: a working model. N. Engl. J. Med. 289(2), 132–136 (1973)PubMedCrossRefGoogle Scholar
  34. 34.
    Department of Health and Human Services: Healthy people 2010, Reproductive health. Available at http://www.hhs.gov/opa/pubs/hp2010/hp2010_rh.pdf (2001). Accessed 8 August 2011
  35. 35.
    OECD. OECD Glossary of statistical terms. Available at: http://www.oecd-ilibrary.org/glossaries (2008). Accessed 8 August 2011
  36. 36.
    OECD. OECD Health Data: Health status, OECD Health Statistics (database). (2010)Google Scholar
  37. 37.
    World Health Organization: Global health observatory data repository. Available at http://apps.who.int/ghodata/# Accessed 20 February 2011
  38. 38.
    OECD. OECD Health Data: Health care resources, OECD Health Statistics (database). (2010)Google Scholar
  39. 39.
    OECD. OECD Health Data: economic references, OECD Health Statistics (database). (2010)Google Scholar
  40. 40.
    OECD. OECD Health Data: non-medical determinants of health, OECD Health Statistics (database). (2010)Google Scholar
  41. 41.
    OECD. OECD Factbook Statistics 2010: Country Indicators, OECD Factbook Statistics (database). (2010)Google Scholar
  42. 42.
    Central Intelligence Agency, USA: The world Factbook. Available at https://www.cia.gov/library/publications/the-world-factbook/fields/2172.html Accessed 20 February 2011
  43. 43.
    Yale Center for Environmental Law and Policy (YCELP) and Center for International Earth Science Information Network (CIESIN), Columbia University, with the World Economic Forum, and Joint Research Centre (JRC) of the European Commission: 2008 Environmental Performance Index. Available at http://sedac.ciesin.columbia.edu/es/epi/ (2008). Accessed 20 February 2011
  44. 44.
    Paris, V., Devaux, M., Wei, L.: Health Systems Institutional Characteristics. OECD Economics Department Working Papers, No. 50. (2010). doi:  10.1787/5kmfxfq9qbnr-en
  45. 45.
    Dorling, D.: Unemployment and health. BMJ 338, b829 (2009)PubMedCrossRefGoogle Scholar
  46. 46.
    House, J.S., Williams, D.R.: Understanding and reducing socioeconomic and racial/ethnic disparities in health. In: Smedley, B.D., Syme, S.L. (eds.) Promoting Health: Intervention Strategies From Social and Behavioral Research, pp. 81–124. National Academy Press, Washington (2000)Google Scholar
  47. 47.
    Robert, S.A., House, J.S.: Socioeconomic inequalities in health: Integrating individual-, community-, and societal-level theory and research. In: Albrecht, G., Fitzpatrick, R., Scrimshaw, S. (eds.) Handbook of Social Studies in Health and Medicine, pp. 115–135. Sage Publications Ltd, London (2000)CrossRefGoogle Scholar
  48. 48.
    Ezzati, M., Lopez, A.D., Rodgers, A., Vander Hoon, S., Murray, C.J.L.: Selected major risk factors and global and regional burden of disease. Lancet 360, 1347–1360 (2002)PubMedCrossRefGoogle Scholar
  49. 49.
    Rosner, B.: Fundamentals of Biostatistics. Books/Cole, Boston (2010)Google Scholar
  50. 50.
    Kujala, U.M., Kaprio, J., Koskenvuo, M.: Modifiable risk factors as predictors of all-cause mortality: the roles of genetics and childhood environment. Am. J. Epidemiol. 156, 985–993 (2002)PubMedCrossRefGoogle Scholar
  51. 51.
    Laaksonen, M., Mcalister, A.L., Laatikainen, T., Drygas, W., Morava, E., Nūssel, E., Oganov, R., Pardell, H., Uhanov, M., Puska, P.: Do health behaviour and psychosocial risk factors explain the European East-West gap in health status? Eur J Public Health 11, 65–73 (2001)PubMedCrossRefGoogle Scholar
  52. 52.
    Isaacs, S.L., Schroeder, S.A.: Class—the ignored determinant of the nation’s health. N. Engl. J. Med. 351, 1137–1142 (2004)PubMedCrossRefGoogle Scholar
  53. 53.
    Hollingsworth, B., Peacock, S.: Efficiency Measurement in Health and Health Care. Routledge, New York (2008)Google Scholar
  54. 54.
    Adler, N., Friedman, L., Sinuany-Stern, Z.: Review of ranking methods in the data envelopment analysis context. Eur. J. Oper. Res. 140, 249–265 (2002)CrossRefGoogle Scholar
  55. 55.
    Hurley, J.: An overview of the normative economics of the health sector. In: Culyer, A.J., Newhouse, J.P. (eds.) Handbook of health economics, pp. 55–118. Elsevier, New-York (2000)Google Scholar

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

Personalised recommendations