The Efficiency of Public and Private Health Expenditures: DEA Approach

The problem of increase in productivity and efficiency of health expenditures is important for all countries. In order to increase efficiency and productivity, cognition of the status and efficiency measurement in health system is important. Scope of the present study is Middle East and North Africa (MENA) countries over period of 2005-2010 and for this purpose; we used a Data Envelopment Analysis (DEA). This study is analytical- descriptive study. In this study, the Data Envelopment Analysis (DEA) method and GAMS software are used to determine the efficiency of public and private health expenditures. Output variables include public health expenditures and private health expenditures and input variables encompass life expectancy, crude death rate, infant mortality rate, under 5 mortality rate and fertility rate. Average technical efficiency of health expenditures in the public and private sectors are 0.63 and 0.25 respectively, Results of comparison between the efficiency of public and private health expenditures in MENA countries show that on the one hand, the average efficiency of public health expenditures is always more than the average of private health expenditures efficiency. On the other hand, the difference between the average efficiency of public and private health expenditures has declined over the period. Sensitivity analysis also shows the efficiency of many countries is sensitive to factors such as life expectancy, crude death rates and fertility rates. Average technical efficiency of health expenditures in the public and private sectors are 0.63 and 0.25 respectively. The efficiency of public health expenditures more than the efficiency of private health expenditures, Also, the review of public health expenditures, redefining of public expenditures and consider the role of private expenditures seems to be necessary.