Relative (in)efficiency and its opportunity cost of the U.S healthcare spending: a data envelopment analysis approach

Hyungue Lim () and Jongsung Kim ()
Additional contact information
Hyungue Lim: Bryant University
Jongsung Kim: Bryant University

Economics Bulletin, 2022, vol. 42, issue 2, 990 - 1001

Abstract: Among the OECD countries, the U.S. spends the most on healthcare. However, the health outcome of the U.S. population, measured by life expectancy at birth, is not better than that of other high-income OECD countries. This signals an inefficiency in healthcare spending in the U.S. We use the Data Envelopment Analysis (DEA) to measure such inefficiencies. DEA results provide information about what optimal outcome could have been at certain point in time. We further calculate the aggregated value of inefficient healthcare spending in the U.S. and call this value the opportunity cost. We found that from 2000 to 2017, the opportunity cost was at least 3% of the GDP each year, and the total value of the opportunity cost amounted to at least 26% of 2017 GDP.

Keywords: Healthcare Expenditure; Opportunity Cost; Life Expectancy; DEA; Efficiency (search for similar items in EconPapers)
JEL-codes: D6 I1 (search for similar items in EconPapers)
Date: 2022-06-30
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2022/Volume42/EB-22-V42-I2-P85.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-21-00347

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().