Health System Performance in OECD Countries: Data Envelopment Analysis

Abstract

Health economics is one the most important areas of economical science to measure countries’ development levels, efficiency and effectiveness. Every country implements their own health policy according to countries’ economic, cultural and social situations. These policies mainly include an arrangement about health financing and usage of limited health resources. There are four main health financing approaches in the literature, which are Beveridge based on tax payment to provide healthcare services to their citizens, Bismarck based on employer and employees payroll deduction to provide healthcare services to their citizens, National Health Insurance based on both tax payments and insurance to provide healthcare services to their citizens and Out-of-Pocket based on directly private payments to provide healthcare services to their citizens. The main purpose of the study is to understand the effect of these different health system models on healthcare system performances. In this dissertation, taking into account the resources of health systems and the differences in their financing models, diversities were tried to be found between the OECD countries’ health system performance levels. Data Envelopment Analysis (DEA) was implemented to determine efficiency levels of countries. According to DEA results, the question as to which health system model is better was discussed. Life Expectancy and Infant Survival Rate were chosen as output variables. Public Health Expenditures, Private Health Expenditures, GDP per Capita and Number of Physicians were chosen as input variables. Data on the above variables from 2000 to 2014 were used in this thesis. Before the DEA implementation, linear regression analysis was implemented to see the general frame and the robustness of the data. Efficiency results mainly show compatibility with previous studies’ results.