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The efficiency of the health system in South Africa: evidence from stochastic frontier analysis

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  • Yohannes Kinfu

Abstract

The availability of increased resources and the lack of parallel improvement in health status have renewed interest on health system performance, particularly where progress towards the Millennium Development Goals has been slow. Since the political transition in 1994, South Africa has consistently invested over eight of its Gross Domestic Product (GDP) on health, but so far returns remain uneven, with some localities delivering lower outcomes than others, even when they have comparable input levels. This study measures the performance of the country's health system, following a stochastic production frontier approach. Results have revealed that eight of the 52 districts in the country had an efficiency score of below 60%, and in four of these, the score was below 50%. Technical inefficiency was positively and significantly associated with HIV prevalence and illiteracy rates reported for districts. Overall mean technical efficiency (TE) in the country was around 80%. Given this, further improvements in health outcome in the country are expected to depend both on its ability to address existing inefficiencies and on the capacity to invest additional resources in communities where existing services were already inadequate.

Suggested Citation

  • Yohannes Kinfu, 2013. "The efficiency of the health system in South Africa: evidence from stochastic frontier analysis," Applied Economics, Taylor & Francis Journals, vol. 45(8), pages 1003-1010, March.
  • Handle: RePEc:taf:applec:45:y:2013:i:8:p:1003-1010
    DOI: 10.1080/00036846.2011.613787
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    File URL: http://hdl.handle.net/10.1080/00036846.2011.613787
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    References listed on IDEAS

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    1. Willam Greene, 2005. "Fixed and Random Effects in Stochastic Frontier Models," Journal of Productivity Analysis, Springer, vol. 23(1), pages 7-32, January.
    2. William Greene, 2004. "Distinguishing between heterogeneity and inefficiency: stochastic frontier analysis of the World Health Organization's panel data on national health care systems," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 959-980.
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    Cited by:

    1. Driouchi, Ahmed, 2015. "New Health Technologies and Health Workforce in Developing Economies," MPRA Paper 67775, University Library of Munich, Germany.

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