Identifying the causes of inefficiencies in health systems

Persistent growth in health expenditures coupled with fiscal pressures have led to widespread calls for efficiency improvements. However, identifying the sources of inefficiencies in health systems remains challenging. In this article, we provide an analytic framework to facilitate better understanding and interpretation of common health system efficiency metrics. To demonstrate its potential, we apply the framework to a simple efficiency metric comparing per capita health care expenditure to amenable mortality rates in the EU-28 Member States. This exercise highlights the information each metric can and cannot tell analysts and decision-makers. Going forward, more refined metrics should be developed based on more standardised and detailed cost accounting data and linked datasets and registries.