Technical efficiency in the Use of Health Care Resources: A Case Study of Tamil Nadu

This paper analyzes technical efficiency in the production of aggregate health outcomes of reduced infant mortality and increased life expectancy, using the health data at the district level of the State of Tamilnadu. Application of data envelopment analysis (DEA) reveals that some districts achieve relative efficiency advantages; including those with good health outcomes e.g. Coimbatore, Nillgiries, Nagapattinam, Trichy and those with modest health outcomes like Madurai, Theni. We conclude the districts may learn from districts more economical in their allocation of healthcare resources. The findings indicate that 52 percent of the districts are inefficient as far as life expectancy is concerned whereas 72 percent are inefficient for infant mortality rate as an outcome whilst the findings for input reduction suggest that the technically inefficient districts of Tamilnadu on an average can reduce inputs by 13% without raising the level of infant mortality. Alternatively they can reduce inputs by 10% without reducing life expectancy. Specifically, it is found that districts like Trichy, Nagapattinam, Namakkal, Erode, Kancheepuram can substantially reduce inputs while maintaining the current level of life expectancy and infant mortality rate.