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The determinants of efficiency in the Canadian health care system

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  • Allin, Sara
  • Grignon, Michel
  • Wang, Li

Abstract

In spite of the vast number of studies measuring economic efficiency in health care, there has been little take-up of this evidence by policy-makers to date. This study provides an illustration of how a system-level study drawing on best practice in empirical measurement of efficiency may be of practical use to health system decision makers and managers. We make use of the rich data available in Canada to undertake a robust two-stage data envelopment analysis to calculate efficiency at the regional (sub-provincial) level. Decisions about what the health system produces (the outcome to measure efficiency against) and what are the resources it has to produce that outcome were based on interviews and consultation with health system decision makers. Overall, we find large inefficiencies in the Canadian health care system, which could improve outcomes (here, measured as a reduction in treatable causes of death) by between 18 and 35% across our analyses. Also, we find that inefficiencies are the result of three main sets of factors that policy makers could pay attention to: management factors, such as hospital re-admissions; public health factors, such as obesity and smoking rates; and environmental factors such as the population’s average income.

Suggested Citation

  • Allin, Sara & Grignon, Michel & Wang, Li, 2016. "The determinants of efficiency in the Canadian health care system," Health Economics, Policy and Law, Cambridge University Press, vol. 11(1), pages 39-65, January.
    • Handle: RePEc:cup:hecopl:v:11:y:2016:i:01:p:39-65_00
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    Cited by:

    1. Sebastian Kohl & Jan Schoenfelder & Andreas Fügener & Jens O. Brunner, 2019. "The use of Data Envelopment Analysis (DEA) in healthcare with a focus on hospitals," Health Care Management Science, Springer, vol. 22(2), pages 245-286, June.
    2. Dino Rizzi & Michele Zanette, 2021. "Potential efficiency gains and expenditure savings in the Italian Regional Healthcare Systems," Politica economica, Società editrice il Mulino, issue 2, pages 187-214.
    3. Rahab Mbau & Anita Musiega & Lizah Nyawira & Benjamin Tsofa & Andrew Mulwa & Sassy Molyneux & Isabel Maina & Julie Jemutai & Charles Normand & Kara Hanson & Edwine Barasa, 2023. "Analysing the Efficiency of Health Systems: A Systematic Review of the Literature," Applied Health Economics and Health Policy, Springer, vol. 21(2), pages 205-224, March.
    4. Diogo Cunha Ferreira & Alexandre Morais Nunes & Rui Cunha Marques, 2020. "Operational efficiency vs clinical safety, care appropriateness, timeliness, and access to health care," Journal of Productivity Analysis, Springer, vol. 53(3), pages 355-375, June.
    5. Margit Sommersguter-Reichmann, 2022. "Health care quality in nonparametric efficiency studies: a review," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 30(1), pages 67-131, March.

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