Artha Vijnana: Journal of The Gokhale Institute of Politics and Economics

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

A Study of Health Expenditure Efficiency in India:A Data Envelopment Analysis


Affiliations
1 St. Francis Institute of Management and Research, Borivali, Mumbai 400103, Maharashtra, India
     

   Subscribe/Renew Journal


Health being a state subject in India, it depends much on the ability of the state to allocate higher budgetary support to health sector. Hence, an analysis of public expenditure on health by states assumes significance. Simply increasing the expenditure on health may not significantly improve the health outputs and outcomes if it is not effective. This paper examines the relative efficiency of the states in handling the health expenditure and health inputs to increase the coverage of health service.

Applying an output oriented DEA model to a sample of states, it examines health expenditure efficiency in India in terms of health service coverage. Out of 29 states which are considered for analysis, 20 (70 per cent) are found to be technically efficient with a technical efficiency score of 100 per cent. The overall scale efficiency average is 0.935 and the standard deviation is 0.131. The findings suggest that not all states are successful in managing the health inputs to achieve optimal output. It is necessary for the inefficient states to benchmark with peers and learn from them. This paper provides evidence of the health expenditure efficiency of the states. The analysis of public expenditure on health by states assumes greater significance because improving the efficiency of public expenditure on health is a priority across them.


Subscription Login to verify subscription
User
Notifications
Font Size

  • António, A., L. Schuknecht and V. Tanzi (2010), Public Sector Efficiency: Evidence for New EU Member States and Emerging Markets, Applied Economics, 42(17): 2147–2164.

  • Banker, D., A. Charnes and W. Cooper (1984), Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis, Manage Sci, 30(9): 1078–1092

  • Bloom, D.E. and D. Canning (2008), Population Health and Economic Growth, in M. Spence and M.A. Lewis (Eds.), Health and Growth, Washington, DC: World Bank, pp. 53-75.

  • Charnes, A., W. Cooper and E. Rhodes (1978), Measuring Efficiency of Decision-making Units, European Journal of Operations Research, 2(6): 429–444.

  • Cooper, W., M. Seiford and K. Tone (2006), Data Envelopment Analysis: A Comprehensive Text with Models, Applications, References, and DEA-Solver, 2nd Ed. Springer, New York.

  • Evans, David B., A. Tandon, C.L. Murray, and J.A. Lauer (2000), Comparative Efficiency of National Health Systems in Producing Health: An Analysis of 191 Countries, GPE Discussion Paper No. 29 (Geneva: World Health Organization).

  • Farrell, M. (1957), The Measurement of Productive Efficiency, J R Stat Soc Ser, A 120(Part 3): 253–290.

  • Francesco, G. and E. Ley (2012), Quality of Government and Living Standards: Adjusting for the Efficiency of Public Spending, IMF Working Paper No. 12/182 (Washington: International Monetary Fund).

  • Gupta, S., G. Schwartz, S. Tareq, R. Allen, I. Adenauer, K. Fletcher and D. Last (2007), Fiscal Management of Scale-Up Aid, IMF Working Paper No. 07/222 (Washington: International Monetary Fund).

  • Gupta, S., M. Verhoeven and E.R. Tiongson (2002), The Effectiveness of Government Spending on Education and Health Care in Developing and Transition Economies, European Journal of Political Economy, 18(4): 717.

  • Hadad, Y., B. Keren and O. Barkai (2011), A Wage Incentive Plan for Branch Managers Using the DEA Methodology, International Journal of Productivity and Performance Management, 60(4): 326-338.

  • Haritha, J. (2015), In Kerala's Malappuram, Islamic Religious Stigma could be Costing Young Lives, say Health Officials, News Minute, 22 September, http://www.thenewsminute.com/article/keralas-malappuram-islamic-religious-stigma-could-be-costing-young-lives-say-health#sthash.el8HvNIS.dpuf.

  • Herrera, S. and G. Pang (2005), Efficiency of Public Spending in Developing Countries: An Efficiency Frontier Approach, Technical University of Lisbon, Mimeo IMF World Economic and Financial Surveys, World Economic Outlook Database, October 2010.

  • Isabelle, J., C. André and C. Nicq (2010), Health Care Systems: Efficiency and Institutions, OECD Economics Department Working Paper No. 769 (Paris: Organisation for Economic Cooperation and Development).

  • Javaid, K., M. Neidhardt, T. Reynolds, A. Cullen, C.L. Anderson, J. Long and L. Manhart (2015), Morbidity and Economic Growth, Evans School Policy Analysis and Research (EPAR), EPAR Brief No. 293.

  • Jyoti, D.K. Banwet and S.G. Deshmukh (2008), Evaluating Performance of National R&D Organizations using Integrated DEA‐AHP Technique, International Journal of Productivity and Performance Management, 57(5): 370-388, https://doi.org/10.1108/17410400810881 836

  • Karsak, E.E. and M.A. Karadayi (2017), Imprecise DEA Framework for Evaluating Health-care Performance of Districts, Kybernetes, 46(4): 706-727, https://doi.org/10.1108/K-05-2015-0139

  • Kerala Health Policy Draft (2013), Health and Family Welfare Department, Government of Kerala.

  • Lavado, R.F., L.P. Lagrada and B.C. Gozun (2010), Using DEA to Assess the Efficiency of Public Health Units in Providing Health Care Services, in Kenneth D. Lawrence, Gary Kleinman (Ed.), Applications in Multicriteria Decision Making, Data Envelopment Analysis, and Finance, (Applications of Management Science, Volume 14) Emerald Group Publishing Limited, pp. 237-248.

  • Marijn, V., V. Gunnarsson and S. Carcillo (2007), Education and Health in G7 Countries: Achieving Better Outcomes with Less Spending, IMF Working Paper No. 07/263, Washington: International Monetary Fund.

  • Ministry of Health and Family Welfare (2006), National Family Health Survey 3: Kerala, Mumbai: International Institute for Population Sciences, http://rchiips.org/nfhs/NFHS-3percent20Data/ke_state_report_for_website.pdf.

  • ---------- (2015), Mission Indradhanush, National Health Portal: Government of India, http://www.nhp.gov.in/health-programmes/national-health-programmes/missionindradhanush.

  • Ministry of Statistics and Programme Implementation (2014), Key Indicators of Social Consumption: Health, National Sample Survey Office: Government of India, http://mospi.nic.in/Mospi_New/upload/nss_71st_ki_health_30june15.pdf.

  • Naha, L. and Abdul (2015), Orthodoxy Defeats Immunisation, The Hindu, 18 September, http://www.thehindu.com/news/national/kerala/malappuram-children-under-observation-for-diphtheria/ article7663971.ece.

  • Nath, B. and T.G. Mahanta (2010), Investigation of an Outbreak of Diphtheria in Borborooah Block of Dibrugarh District, Assam, Indian Journal of Community Medicine : Official Publication of Indian Association of Preventive & Social Medicine, 35(3): 436–438, http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2963888/.

  • Nijish, T.P. (2015), Diphtheria Claims 12 Year Old Boy in Malappuram, The Times of India, 17 September, available at http://timesofindia.indiatimes.com/city/kozhikode/Diphtheria-claims-12-year-old-boy-in-Malappuram/articleshow/49001590.cms.

  • Pendar, P., F.M. Rafiei and S.A.N. Tabatabaei (2018), Performance Evaluation of the Public Transportation System in Esfahan Steel Company from the Production Line Employees'

  • Perspective with Data Envelopment Analysis Approach, Int. J. of Productivity and Quality Management, 23(2): 137-162.

  • Psacharopoulos, G. and H.A. Patrinos (2004), Returns to Investment in Education: A Further Update, Education Economics, 12(2): 111-134.

  • Sachs, J.D. (2002), Macroeconomics and Health: Investing in Health for Economic Development, Revista Panamericana de Salud Pública, 12(2): 143-144.

  • Shaffi, M., K.R. Nayar and S.S. Lal (2015), Diphtheria Deaths in Kerala, Economic and Political Weekly, 50(43), 24 October 2015.

  • Sinimole, K.R. (2012), Evaluation of the Efficiency of National Health Systems of the Members of World Health Organization, Leadership in Health Services, 25(2): 139-150.

  • World Health Organization (2013), Report of the 23rd Meeting of Global Advisory Committee on Vaccine Safety, Weekly Epidemiological Record, No. 29, 19 July, http://www.who.int/vaccine_safety/committee/reports/wer8829.pdf?ua=1.


Abstract Views: 513

PDF Views: 0




  • A Study of Health Expenditure Efficiency in India:A Data Envelopment Analysis

Abstract Views: 513  |  PDF Views: 0

Authors

K. R. Sinimole
St. Francis Institute of Management and Research, Borivali, Mumbai 400103, Maharashtra, India

Abstract


Health being a state subject in India, it depends much on the ability of the state to allocate higher budgetary support to health sector. Hence, an analysis of public expenditure on health by states assumes significance. Simply increasing the expenditure on health may not significantly improve the health outputs and outcomes if it is not effective. This paper examines the relative efficiency of the states in handling the health expenditure and health inputs to increase the coverage of health service.

Applying an output oriented DEA model to a sample of states, it examines health expenditure efficiency in India in terms of health service coverage. Out of 29 states which are considered for analysis, 20 (70 per cent) are found to be technically efficient with a technical efficiency score of 100 per cent. The overall scale efficiency average is 0.935 and the standard deviation is 0.131. The findings suggest that not all states are successful in managing the health inputs to achieve optimal output. It is necessary for the inefficient states to benchmark with peers and learn from them. This paper provides evidence of the health expenditure efficiency of the states. The analysis of public expenditure on health by states assumes greater significance because improving the efficiency of public expenditure on health is a priority across them.


References





DOI: https://doi.org/10.21648/arthavij%2F2019%2Fv61%2Fi2%2F183614