EFFICIENCY AND PRODUCTIVITY EVALUATION OF HEALTHCARE SYSTEMS OF NORTHERN EUROPE AND THE BALTIC REGION

The study estimates the efficiency of healthcare systems of Northern Europe and the Baltic region countries. The analytical tools of a two-stage Data Envelopment Analysis and Malmquist DEA are applied to assess the efficiency and changes in health systems’ productivity for the studied countries. The study data is extracted from the World Development Indicators from 2000 to 2020. Evidence reveals that only nine countries have an efficient healthcare system, and the healthcare systems of Germany and Lithuania were found to be inefficient. A reference between the inefficient and the efficient countries further demonstrates that the inefficient countries outperformed the reference group. Moreover, the estimates obtained by applying the Tobit regression model show that only the Gini coefficient significantly affects the inefficiency of the healthcare systems of the studied countries. Furthermore, it is found that the total factor productivity declined by 0,1% over the period of one decade, and the decay in healthcare systems’ productivity is driven purely by technical change not by technological change. Therefore, the policy implication of the findings suggests that pursuing sound economic policies that ensure fair income distribution in the studied countries has the potential to overcome the existing level of inefficiency in the healthcare systems and subsequently lead to improvement in health outcomes.