Technical Efficiencies of Healthcare System in Major States of India

Abstract

Most research works in healthcare efficiency have focused on measuring to organisational level efficiency. The aim of this article is to compare the technical efficiency of healthcare of major states in India based on specific health indicators. In order to improve the health status of a country as a whole, government needs to recast its policies by auditing the performance of the states with reference to their respective health indicators. Our article purports to analyse technical efficiency based on health outcomes such as reduced infant mortality and increased life expectancy at birth. To measure the performance of health system and handle negative data Non-proportional Range Directional Model (NP-RDM ) of Data Envelopment Analysis (DEA ) is used. This model measures the relative efficiency of the states with reference to ideal state. Application of NP-RDM of DEA formulation reveals that some of the states achieve relative efficiency advantages by good health outcomes and some of them by virtue of least utilisation of healthcare resources. This study reveals two categories of states responsible for poor health outcomes of the country. One category of states makes inefficient use of health inputs and the second category of states has only inadequate healthcare resources. They go to show that there is a need to restructure health policies in order to provide the best healthcare services in the country by efficient use of available resources.

Keywords

Health system performance efficiency data envelopment analysis directional distance function

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