Ranking the health system efficiency among Canadian provinces and American states
- Presenter:
Chair: Jon Christianson; Discussant: Jennifer S. Schultz Mon June 5, 2006 13:45-15:15 Room 309
Rationale: The World Health Report 2000 ranks the performance of the health systems on 191 countries. In many countries such as Canada, health systems are actually managed at sub-national levels, provinces or states. In addition, most efficiency studies restrict themselves to a single output measure. We consider the multiple outputs case and apply the methodology, where data permits, at sub-national levels.
Objectives: The objective of this paper is to compare the efficiency of health systems amongst Canadian provinces and American states using non-parametric Data Envelopment Analysis (DEA) approach and a multiple inputs and outputs system.
Methodology: We employ DEA to analyze the technical efficiency of health systems, using both input-oriented and output-oriented approaches to fitting the efficient frontier and comparing the relative efficiency of units within frontier with their best practices peers on the frontier. As inputs we use information on physicians, nurses, hospitals and pharmaceuticals. We fit two models, one measuring inputs in quantity terms and the other measuring them in real expenditure terms, and investigate the implications of these two approaches for measures of relative efficiency. Of particular interest is what measures of expenditure efficiency relative to quantity efficiency can tell us about the degree to which different countries health expenditures go towards increasing factor income rather than increasing output. Another contribution of this paper is to include output variables other than the most commonly used Life Expectancy at Birth variable. Low birth weight infant mortality and life quality variables are very important output variables as the outcomes of the health system performance. We also consider measures of self-reported health status and Potential Year of Life Lost (PYLL) for stroke and cancer. Sensitivity analysis is performed using different sets of output variables.
Results: Half the Canadian provinces and eight American states are technically efficient in both the quantity and monetary models. The analysis suggests that Canadian provinces distributed resources relatively more efficiently overall in comparison with American states. It was determined that American states pay their inputs at levels above those in Canadian provinces’.
Conclusions: The analysis in this paper suggests that Canadian provinces distributed the resources relatively efficiently in comparison with American states. It is more reasonable to compare the health system efficiency at sub-national level. Since the efficiency scores for Canadian provinces are close to one, it is hard to squeeze more output for those inefficient Canadian provinces and we will have to invest more on resources in order to produce more outputs.
