Efficiency of healthcare systems in the European Union states : who performs better : Bismarckians or Beveridgeans?

Abstract

PURPOSE: European nations have established two main institutional arrangements for the funding and delivery of healthcare services. These arrangements for healthcare organisations are the tax-financed National Health Service systems (known as the Beveridgean models) and those operating with Social Health Insurance (known as the Bismarckian models), where the insurance funds may be independent of the government. The current literature is inconclusive with regard to the identification of the more efficient system. The aim of this study is to examine the Bismarckian and Beveridgean healthcare systems in the 28 European Union (EU) member states.

DESIGN/METHODOLOGY/APPROACH: The Data Envelopment Analysis (DEA) has been applied as a quantitative tool to evaluate the efficiency of healthcare systems in the EU states. The DEA evaluates the technical efficiency and aims at estimating the relationship between the inputs and outputs of homogeneous objects. It is a powerful, non-parametric method for evaluating the relative efficiency when there are multiple inputs and outputs. The variant of the superefficient and non-oriented, slack-based DEA model, under the assumption of variable returns to scale, has been used in this study.

FINDINGS: The results of the DEA calculations allowed to rank countries according to their efficiency scores, obtained from the set of the chosen input–output indicators. It was concluded that economies with the Bismarckian healthcare systems showed slightly higher advantages in terms of the efficiency of healthcare spending.

PRACTICAL IMPLICATIONS: These outcomes helped to understand the reason for accepting a particular health financing system in a country, to justify the need for specific improvements and to increase the efficiency, or even establish relevant arguments for major revisions.

ORIGINALITY/VALUE: The study complements the existing knowledge in the literature with an evidence-based discussion, including the pros and cons of the two analysed healthcare models.