Determinants of healthcare system's efficiency in OECD countries

Sharon Hadad, Yossi Hadad, Tzahit Simon-Tuval

Research output: Contribution to journalArticlepeer-review

112 Scopus citations


Objective: Firstly, to compare healthcare systems' efficiency (HSE) using two models: one incorporating mostly inputs that are considered to be within the discretionary control of the healthcare system (i.e.; physicians' density, inpatient bed density, and health expenditure), and another, including mostly inputs beyond healthcare systems' control (i.e.; GDP, fruit and vegetables consumption, and health expenditure). Secondly, analyze whether institutional arrangements, population behavior, and socioeconomic or environmental determinants are associated with HSE. Design: Data envelopment analysis (DEA) was utilized to calculate OECD countries' HSE. Life expectancy and infant survival rate were considered as outputs in both models. Healthcare systems' rankings according to the super-efficiency and the cross-efficiency ranking methods were used to analyze determinants associated with efficiency. Results: (1) Healthcare systems in nine countries with large and stable economies were defined as efficient in model I, but were found to be inefficient in model II; (2) Gatekeeping and the presence of multiple insurers were associated with a lower efficiency; and (3) The association between socioeconomic and environmental indicators was found to be ambiguous. Conclusions: Countries striving to improve their HSE should aim to impact population behavior and welfare rather than only ensure adequate medical care. In addition, they may consider avoiding specific institutional arrangements, namely gatekeeping and the presence of multiple insurers. Finally, the ambiguous association found between socioeconomic and environmental indicators, and a country's HSE necessitates caution when interpreting different ranking techniques in a cross-country efficiency evaluation and needs further exploration.

Original languageEnglish
Pages (from-to)253-265
Number of pages13
JournalEuropean Journal of Health Economics
Issue number2
StatePublished - 1 Apr 2013


  • Data envelopment analysis (DEA)
  • Healthcare system efficiency (HSE)
  • OECD countries
  • Ranking methods

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)
  • Health Policy


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