A field of special interest is the health care sector since a significant share of national income is allocated to this sector and objectives of health policy and - to a certain extent - health statistics are internationally comparable. According to the OECD (2004) health care should be easily accessible, of high quality, affordable, and of good value for money.
Although efficiency studies claim to explain relative efficiency of the whole health care sector – assuming that they exhibit the potential for expenditure cuts or performance improvements – results heavily depend on model specification, i.e. how inputs and outputs are defined (see e.g. Afonso – Aubyn 2005 and 2006, Räty – Luoma 2005, Eugène 2007). In my paper I will discuss the impact of model specification on observed efficiency values. Specifically I will analyse whether or not there are patterns in efficiency estimation results, e.g. if countries with a high performance exhibit high efficiency values.
The paper starts with a brief introduction of recent efficiency studies that compare health care systems in OECD countries. Specifically it compares model specifications and estimation methods and discusses the usefulness and applicability of various input or output (outcome) indicators. It then ranks countries according to their performance (subjective or objective outcome variables) and compares – descriptively – the performance with recent efficiency values which are obtained from various efficiency analyses. Against the background of the strong impact of model specification on efficiency results, I will conclude on the political relevance of such efficiency studies.
Expected results are that neither the “monetary input” nor the “physical input” efficiency studies deliver consistent results which clearly limits the political usefulness of such studies, e.g. the potential range for expenditure cuts remains unclear. Nevertheless such studies are regarded as a valuable starting point for political discussion.
References
Afonso, A., Aubyn, M. (2005). Non-parametric approaches to education and health efficiency in OECD countries. Journal of Applied Economics, Nov./VIII/002, S. 227-246.
Afonso, A., Aubyn, M. (2006). Relative Efficiency of Health Provision: A DEA Approach with Non-discretionary Inputs. Department of Economics at the of and Management, Working Paper No. 2006 /33.
Eugène, B. (2007). The efficiency of Belgian general government in an international perspective. Working Paper Research series of National Bank o f, Prelimanary version.
Räty, T., Luoma, K. (2005). Nonparametric country rankings using health indicators and OECD health data. Valtion taloudellinen tutkimuskeskus, VATT-muistioita 74. OECD (2004). Towards High-performing Health Systems. The OECD Health Project, Summary Report..