Efficiency in health care systems

We calculated Malmquist Productivity Indices to evaluate the efficiency in health care systems in countries of the American Continent as well as OECD countries. The extent of inefficiency is measured by the deviation of its efficiency parameter value from 1, thus if the score is smaller than 1 it means productivity progress as a country delivers a unit of output in period 2 using less inputs, so the country in period 2 is more efficient relative to itself in period 1. The Malmquist Productivity Index can be decomposed into several efficiency measures, such as efficiency change, change in technology, change in pure efficiency, and change in scale efficiency, amongst others.

We use 6 variables as inputs: i) physician’s ratio per a population of 10,000, ii) hospital beds ratio per a population of 1,000, iii) Gross Domestic Product per capita, iv) primary completion rate, v) proportion of population using improved drinking-water sources, and vi) proportion of population using improved sanitation facilities; and 2 variables as outputs: i) infant mortality rate and ii) life expectancy in women between 40 and 44 years of age. The years used are 1990 and 2008 (1991 and 2007 in case there was not information available). Out of the 14 countries for which the Malmquist was computed, Finland is the one with the smallest index (0.87), whereas Nicaragua is the country with the highest index (1.70), right after Cuba, Belgium, Panama, Trinidad and Tobago, El Salvador, Mexico, Paraguay, and Jamaica. The following graph shows the results: