An Assessment of Efficiency-Related Factors of Government Health Expenditures in the Distinguished Countries

Abstract

Introduction: Nowadays, estimating efficiency of health expenses and identifying its related factors has become important issue, and due to the increased expenses around the world, has received considerable attention by policymakers in health sector. This study endeavored to assess the factors affecting the efficiency of government health expenses. Methods: This was a descriptive-analytical study using World Bank databases carried out in the distinguished countries (including Iran) during the years 1995 to 2014. In the first stage, according to the Human Development Index (HDI), the distinguished countries were divided into four groups of countries with very high, high, medium, and low HDI. Then, the Data Envelopment Analysis (DEA) approach was employed to estimate the efficiency scores of countries. In the second stage, the Tobit Panel Data model was estimated to identify the influencing factors on the efficiency of the government health expenditures. Results: The average technical efficiencies observed for countries with very high, high, medium, and low HDI were 0.63, 0.52, 0.28, and 0.48, respectively. The out-of-pocket payment in countries with very high, high, and medium HDI had a positive and significant relationship with the efficiency of government health expenditures. Other variables in countries with very high and high HDI were not statistically significant. Hospital beds had a significant negative relationship with the efficiency of government health expenditures. In countries with low HDI, none of the variables had a relationship with the efficiency of government health expenditures. Conclusion: Findings reveal that the out-of-pocket payment can play a significant role in controlling unnecessary expenditures in very high and high HDI countries. This can be related to the service packages provided in these countries as well. The findings indicate that a service package which is covered by insurance in these countries, and patient do not pay for that, covers essential services for patient, and those services that are not in this package and the patient have to pay for that, are less essential services.

Keywords

• efficiency
• health expenditures
• human development index