Technical Efficiency of Health Systems in African Least Developed Countries

Abstract

Background: Motivated by the fact that between 20-40% of health expenditure around the world is wasted due to inefficiencies the magnitude of these efficiencies/inefficiencies is unknown for African least developed countries (African LDCs). The objective of this study is to estimate the technical efficiency of the health systems in 29 African Least Developed Countries for the 2008-2018 period.

Method: Using the output-oriented Data Envelopment Analysis based on the Variable Returns to Scale assumption, panel data on the input variables including domestic general government health expenditure, domestic private health expenditure, external health expenditure and out-of-pocket expenditure, as well as the output variables including life expectancy at birth, maternal mortality ratio, under-five mortality rate, and infant mortality rate, were taken from the World Health Organization and World Bank.

Results: Findings of the study showed that between 2008 and 2018, 16 African LDCs were technically efficient, while 13 were not. The highest benchmarks for technically inefficient countries were Madagascar (12 peers), Senegal (7 peers), Eritrea and Ethiopia (7 peers), and Rwanda (1 peer). 

Conclusion: The practices of nations with technically efficient health systems can serve as benchmarks for nations with technically inefficient health systems. African LDCs also needed to increase their domestic general government health expenditure, domestic private health expenditure, external health expenditure and out-of-pocket health expenditure to increase their infant survival rate.