Efficiency in Israel Defence Forces Dental Labs: Assessing the Need for Privatizing Publicly Provided Services

Abstract

In the last 10 to 15 years, privatization has been used as a policy instrument to reduce the involvement of the public sector in the provision of a variety of services. The purpose of this paper is to discuss models of privatization in the dental technician market and to report on the findings of an analysis of the functioning and efficiency of such services within the framework of the Israel Defence Forces (IDF). We also develop a method for assessing the quality and efficiency with which such services are produced and assess the need for privatization of the service. Currently, the IDF employs a mixed model of privatization whereby some dental technician services are produced in-house and others are contracted out to the civilian private market. A comparative quantitative analysis of the efficiency, quality, and cost of services indicates that the civilian labs are able to produce prosthetic services at a lower cost per unit of output and at a higher level of quality than are the IDF labs. The highly competitive nature of the industry as well as the relative ease with which the IDF could monitor the quality of service further supports the case for privatization of the entire service. The analysis and method described in this paper can serve as a paradigm for evaluating dental technician services in a variety of settings.