IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v12y2024i12p341-d1542583.html
   My bibliography  Save this article

Falling Short on Long-Term Care Efficiency Change? A Non-Parametric Approach

Author

Listed:
  • Augusto Carlos Mercadier

    (Doctoral School of the Miguel Hernández University of Elche (EDUMH), PhD Program in Economics (DEcIDE), Center of Operations Research (CIO), Miguel Hernandez University of Elche (UMH), 03202 Elche, Spain)

  • Irene Belmonte-Martín

    (Social Sciences and Humanities Department, Miguel Hernandez University of Elche (UMH), 03202 Elche, Spain)

  • Lidia Ortiz

    (Center of Operations Research (CIO), Miguel Hernandez University of Elche (UMH), 03202 Elche, Spain)

Abstract

The European Commission’s 2015 aging report forecasts a substantial increase in public spending on Long-Term Care (LTC) for OECD countries by 2060, posing significant fiscal challenges. This study aims to assess the efficiency and productivity of the LTC sector from 2010 to 2019 and explore whether efficiency gains can alleviate these fiscal pressures. Using a non-parametric Data Envelopment Analysis (DEA) model, combined with Tobit regression, we estimate the efficiency of OECD countries and examine the role of decentralization in shaping performance outcomes. The findings reveal that, on average, countries operate at 94% efficiency, with modest productivity growth. However, technical inefficiencies persist, especially in unitary countries, while federal countries, though initially less efficient, show greater improvements over time. Despite these gains, the current efficiency levels are insufficient to counterbalance the projected increase in LTC demand. Policymakers should prioritize reforms that enhance efficiency through decentralization, promoting accountability and competition as mechanisms to sustain the LTC system in the face of demographic shifts.

Suggested Citation

  • Augusto Carlos Mercadier & Irene Belmonte-Martín & Lidia Ortiz, 2024. "Falling Short on Long-Term Care Efficiency Change? A Non-Parametric Approach," Economies, MDPI, vol. 12(12), pages 1-25, December.
    • Handle: RePEc:gam:jecomi:v:12:y:2024:i:12:p:341-:d:1542583
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/12/12/341/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7099/12/12/341/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Pablo Cos & Enrique Moral-Benito, 2014. "Determinants of health-system efficiency: evidence from OECD countries," International Journal of Health Economics and Management, Springer, vol. 14(1), pages 69-93, March.
    2. Ray, Subhash C & Desli, Evangelia, 1997. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries: Comment," American Economic Review, American Economic Association, vol. 87(5), pages 1033-1039, December.
    3. Vasanthakumar Bhat, 2005. "Institutional arrangements and efficiency of health care delivery systems," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 6(3), pages 215-222, September.
    4. Simar, Leopold & Wilson, Paul W., 2007. "Estimation and inference in two-stage, semi-parametric models of production processes," Journal of Econometrics, Elsevier, vol. 136(1), pages 31-64, January.
    5. Tine Rostgaard & Frode Jacobsen & Teppo Kröger & Elin Peterson, 2022. "Revisiting the Nordic long-term care model for older people—still equal?," European Journal of Ageing, Springer, vol. 19(2), pages 201-210, June.
    6. Léopold Simar & Paul W. Wilson, 1998. "Sensitivity Analysis of Efficiency Scores: How to Bootstrap in Nonparametric Frontier Models," Management Science, INFORMS, vol. 44(1), pages 49-61, January.
    7. Andrei Shleifer, 1985. "A Theory of Yardstick Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 319-327, Autumn.
    8. Besley, Timothy, 2007. "Principled Agents?: The Political Economy of Good Government," OUP Catalogue, Oxford University Press, number 9780199283910, Decembrie.
    9. Timothy J. Coelli & D.S. Prasada Rao & Christopher J. O’Donnell & George E. Battese, 2005. "An Introduction to Efficiency and Productivity Analysis," Springer Books, Springer, edition 0, number 978-0-387-25895-9, June.
    10. Fare, Rolf & Grosskopf, Shawna, 1992. "Malmquist Productivity Indexes and Fisher Ideal Indexes," Economic Journal, Royal Economic Society, vol. 102(410), pages 158-160, January.
    11. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thanh Ngo & Kan Wai Hong Tsui, 2022. "Estimating the confidence intervals for DEA efficiency scores of Asia-Pacific airlines," Operational Research, Springer, vol. 22(4), pages 3411-3434, September.
    2. Iparraguirre, José Luis & Ma, Ruosi, 2015. "Efficiency in the provision of social care for older people. A three-stage Data Envelopment Analysis using self-reported quality of life," Socio-Economic Planning Sciences, Elsevier, vol. 49(C), pages 33-46.
    3. Varabyova, Yauheniya & Schreyögg, Jonas, 2013. "International comparisons of the technical efficiency of the hospital sector: Panel data analysis of OECD countries using parametric and non-parametric approaches," Health Policy, Elsevier, vol. 112(1), pages 70-79.
    4. Valentin Zelenyuk, 2023. "Productivity analysis: roots, foundations, trends and perspectives," Journal of Productivity Analysis, Springer, vol. 60(3), pages 229-247, December.
    5. Adriana Cobas & Alexandros Maziotis & Andrés Villegas, 2023. "Measurement of Efficiency and its Drivers in the Chilean Banking Industry," Working Papers Central Bank of Chile 987, Central Bank of Chile.
    6. Lin Liu & Honggang Sun, 2019. "The Impact of Collective Forestland Tenure Reform on the Forest Economic Efficiency of Farmers in Zhejiang Province," Sustainability, MDPI, vol. 11(8), pages 1-15, April.
    7. Thiago Victorino & Carlos Rosano Peña, 2023. "The Development of Efficiency Analysis in Transportation Systems: A Bibliometric and Systematic Review," Sustainability, MDPI, vol. 15(13), pages 1-32, June.
    8. Vicente J. Bolos & Rafael Benitez & Vicente Coll-Serrano, 2025. "Conventional and Fuzzy Data Envelopment Analysis with deaR," Papers 2506.03766, arXiv.org.
    9. Maria Nieswand & Stefan Seifert, 2016. "Operational Conditions in Regulatory Benchmarking Models: A Monte Carlo Analysis," Discussion Papers of DIW Berlin 1585, DIW Berlin, German Institute for Economic Research.
    10. Brzezicki Łukasz, 2025. "Origin and Evolution of Malmquist Productivity Index: Review of the Literature," Central European Economic Journal, Sciendo, vol. 12(59), pages 102-119.
    11. Pontus Mattsson & Jonas Månsson & Christian Andersson & Fredrik Bonander, 2018. "A bootstrapped Malmquist index applied to Swedish district courts," European Journal of Law and Economics, Springer, vol. 46(1), pages 109-139, August.
    12. José M. Cordero & Agustín García-García & Enrique Lau-Cortés & Cristina Polo, 2021. "Efficiency and Productivity Change of Public Hospitals in Panama: Do Management Schemes Matter?," IJERPH, MDPI, vol. 18(16), pages 1-21, August.
    13. Vittadini, Giorgio & Sturaro, Caterina & Folloni, Giuseppe, 2022. "Non-Cognitive Skills and Cognitive Skills to measure school efficiency," Socio-Economic Planning Sciences, Elsevier, vol. 81(C).
    14. Wijesiri, Mahinda & Yaron, Jacob & Meoli, Michele, 2017. "Assessing the financial and outreach efficiency of microfinance institutions: Do age and size matter?," Journal of Multinational Financial Management, Elsevier, vol. 40(C), pages 63-76.
    15. Santos, João Vasco & Martins, Filipa Santos & Pestana, Joana & Souza, Júlio & Freitas, Alberto & Cylus, Jonathan, 2023. "Should we adjust health expenditure for age structure on health systems efficiency? A worldwide analysis," LSE Research Online Documents on Economics 118298, London School of Economics and Political Science, LSE Library.
    16. Kaffash, Sepideh & Azizi, Roza & Huang, Ying & Zhu, Joe, 2020. "A survey of data envelopment analysis applications in the insurance industry 1993–2018," European Journal of Operational Research, Elsevier, vol. 284(3), pages 801-813.
    17. Pontus Mattsson & Jonas Månsson & Christian Andersson & Fredrik Bonander, 2018. "Correction to: A bootstrapped Malmquist index applied to Swedish district courts," European Journal of Law and Economics, Springer, vol. 46(1), pages 141-142, August.
    18. Neves Bezerra de Melo, Felipe Luiz & Sampaio, Raquel Menezes Bezerra & Sampaio, Luciano Menezes Bezerra, 2018. "Efficiency, productivity gains, and the size of Brazilian supermarkets," International Journal of Production Economics, Elsevier, vol. 197(C), pages 99-111.
    19. Cristian Barra & Roberto Zotti, 2016. "Measuring Efficiency in Higher Education: An Empirical Study Using a Bootstrapped Data Envelopment Analysis," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 22(1), pages 11-33, February.
    20. Ajayi, Victor & Anaya, Karim & Pollitt, Michael, 2022. "Incentive regulation, productivity growth and environmental effects: the case of electricity networks in Great Britain," Energy Economics, Elsevier, vol. 115(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:12:y:2024:i:12:p:341-:d:1542583. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.