Measuring the efficiency of health systems of OECD countries by data envelopment analysis

ABSTRACT

This study aims to assess the efficiency of health sectors of 34 OECD countries by employing input-oriented data envelopment analysis (DEA) method both under constant and variable returns to scale assumptions. In the analysis, the number of doctors, number of patient beds and health expenditure per capita were used as input variables and life expectancy at birth and infant mortality rate were used as outputs. At the first stage, DEA analysis was performed for 34 countries, and at the second stage outlier 8 countries were eliminated to form a more homogeneous group and to achieve more accurate results. 11 of the 26 countries were found to have efficient health systems, and there is room for efficiency improvements in health sector in the remaining 15 countries.

KEYWORDS:

• Efficiency
• data envelopment analysis (DEA)
• health sector
• health expenditures
• OECD countries

JEL CLASSIFICATION:

• H51
• I18
• H11

Acknowledgements

We would like to thank Isil Irmak (Ministry of Development) for her comments and contributions. The views expressed in this article are those of ours and do not necessarily represent the views of the Ministry of Development of Turkey.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Since many studies have shown that there are numerous factors affecting the relationship between the health expenditures and outcomes and the impact of these factors make this relationship nonlinear, one might indicate that a need for a composite indicator arises. However, since our study has been conducting the analysis employing data for only 1 year and since the mentioned nonlinearity has been a long-run phenomenon, we abstain from deriving a composite indicator.