Management in the South African public health sector: An x-inefficiency perspective

Abstract

Inefficiency in the South African public health sector contributes significantly to the country's relatively poor health outcomes, yet it is poorly understood and overshadowed by health care financing and payment issues. This paper explores this situation from the perspective that the public health sector forms part of a complex adaptive system from which inefficiencies emerge endogenously. Leibenstein's seminal work provides the basis for a conceptual framework that explores and describes management in the public health sector from an x-inefficiency perspective. Further research into x-inefficiency and its underlying causes may be useful to guide the design of appropriate health policies in the South African context. Unless reforms targeted at improving x-efficiency are prioritised, increased revenue allocation to the public health sector will have a sub-optimal impact on health outcomes.

Keywords:

• complex adaptive systems
• human behaviour
• rules and institutions

Acknowledgements

The authors wish to thank Elizabeth Stoltz, of the University of the Western Cape and Stellenbosch University, and Servaas Van Der Berg, of Stellenbosch University, for their helpful comments, advice and moral support.

Notes

¹A term coined by Leibenstein, x-efficiency is an open-ended concept which describes the effectiveness with which a set of inputs can produce outputs. The ‘x’ captures all instances of non-allocative inefficiencies which arise from activities within the organisation (Leibenstein, 1979:14). Some studies refer to x-(in)efficiency but actually capture technical (in)efficiency.

²A portmanteau word combining ‘satisfy’ with ‘suffice’. See www.realtech.co.za/realwiki.php?title=Satisfice Accessed 29 July 2012.

³Roberts et al. (2008) identify five ‘control knobs’: financing, payment, regulation, organisation and behaviour.