Comparing efficiency of health systems across industrialized countries: a panel analysis

Area of Science:

• Health economics
• Comparative health systems analysis
• Econometrics

Background:

• Previous World Health Organization (WHO) rankings suggested the US health care system is inefficient compared to other Organization for Economic Cooperation and Development (OECD) countries.
• Methodological concerns, including simplistic approaches and poor variable selection, have previously been raised regarding these rankings.
• A re-evaluation using updated modeling techniques and comprehensive OECD data is warranted.

Purpose of the Study:

• To re-examine the efficiency rankings of the US health care system within the OECD.
• To assess the robustness of health system rankings using advanced statistical modeling.
• To explore the impact of different methodologies and variable choices on efficiency assessments.

Main Methods:

• Utilized OECD Health Data for 25 member countries.
• Compared results from stochastic frontier analysis (SFA) and fixed effects models.
• Estimated total life expectancy and life expectancy at age 60, incorporating health resources, behaviors, and economic/environmental factors.

Main Results:

• The US ranking consistently fell within the top five across 36 models, but never achieved the highest position.
• Stochastic frontier analysis (SFA) identified a consistent leading country, though overall country rankings lacked stability.
• The US healthcare system's efficiency ranking was not consistently at the bottom but showed variability.

Conclusions:

• Health system rankings are fragile and sensitive to the statistical methodologies employed.
• Rankings are not robust to variations in variable inclusion or different analytical approaches.
• Future international comparisons should utilize a diverse range of methodologies for a more accurate assessment of health system efficiency.