Objective

To measure the efficiency of 190 countries in producing health results and the factors that determine such efficiency.

Methodology

A data envelopment analysis was conducted on worldwide data from the year 2009 in order to estimate the efficient frontier, based on total health expenditure per capita, as well on infant mortality rate and life expectancy at birth. At the same time, an analysis of the determinants of expenditure efficiency was performed through Tobit models.

Results

African nations have lower technical and allocative efficiency, but higher scale efficiency. The quality of institutions has a statistically significant impact on the levels of technical and allocative efficiency and on the levels of scale efficiency. The percentage of health expenditure financed by private insurers has an impact on technical and allocative efficiency, while urbanization rates affect the scale efficiency.

Discussion

the fact that more than 70 % of countries show decreasing returns suggest that, once certain minimal standards of life quality are achieved, the marginal effect of each additional dollar assigned to health is not substantial. Conversely, in poor countries, where the expenditure in health presents increasing returns, the health performance could be substantially better by marginally raising the expenditure. On the other hand, financing structures of health expenditures may influence technical-allocative efficiency, while urbanization levels may impact scale efficiency (source: MeSH, NLM).