Using Data Envelopment Analysis to Address the Challenges of Comparing Health System Efficiency

Efficiency is one of the most potent measures of health system performance and is of particular interest to policy makers because it seeks to assess the valued outcomes of a health system in relation to the resources that are sacrificed to achieve those outcomes. However, the production process of the health care system is a complex sequence, and most indicators are only able to capture part of that process; these indicators offer limited scope for analysis. While researchers have previously constructed composite indicators which combine partial measures into a single number, the weights used for aggregating data can be contentious and may not be universally applicable across systems. Data envelopment analysis (DEA) is most often used to compare the productivity of different producing entities, including health systems. In this article, we instead propose a method that relies on DEA to construct composite health system efficiency indicators from several partial efficiency measures. Among other noted benefits, this enables the construction of composite indicators where different weights are attached to partial indicators for each country, allowing countries to be viewed according to the weights that cast each in the best light. Our application of this method suggests that there is reasonable consistency among the countries that are found to be efficient.