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

Yohannes Kinfu

Applied Economics, 2013, vol. 45, issue 8, 1003-1010

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.

Date: 2013
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DOI: 10.1080/00036846.2011.613787

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