Abstract
BackgroundGeneral Government Health Expenditure (GGHE) in Mauritius accounted for only 10% of General Government Expenditure for the fiscal year 2018. This is less than the pledge taken under the Abuja 2001 Declaration to allocate at least 15% of national budget to the health sector. The latest National Health Accounts also urged for an expansion in the fiscal space for health. As public hospitals in Mauritius absorb 70% of GGHE, maximising returns of hospitals is essential to achieve Universal Health Coverage. More so, as Mauritius is bracing for its worst recession in 40 years in the aftermath of the COVID-19 pandemic public health financing will be heavily impacted. A thorough assessment of hospital efficiency and its implications on effective public health financing and fiscal space creation is, therefore, vital to inform ongoing health reform agenda.ObjectivesThis paper aims to examine the trend in hospital technical efficiency over the period 2001–2017, to measure the elasticity of hospital output to changes in inputs variables and to assess the impact of improved hospital technical efficiency in terms of fiscal space creation.MethodsAnnual health statistics released by the Ministry of Health and Wellness and national budget of the Ministry of Finance, Economic Planning and Development were the principal sources of data. Applying Stochastic Frontier Analysis, technical efficiency of public regional hospitals was estimated under Cobb–Douglas, Translog and Multi-output distance functions, using STATA 11. Hospital beds, doctors, nurses and non-medical staff were used as input variables. Output variable combined inpatients and outpatients seen at Accident Emergency, Sorted and Unsorted departments. Efficiency scores were used to determine potential efficiency savings and fiscal space creation.FindingsMean technical efficiency scores, using the Cobb Douglas, Translog and Multi-output functions, were estimated at 0.83, 0.84 and 0.89, respectively. Nurses and beds are the most important factors in hospital production, as a 1% increase in the number of beds and nurses, result in an increase in hospital outputs by 0.73 and 0.51%, respectively. If hospitals are to increase their inputs by 1%, their outputs will increase by 1.16%. Hospital output process has an increasing return to scale. With technical efficiencies improving to scores of 0.95 and 1.0 in 2021–2022, potential savings and fiscal space creation at hospital level, would amount to MUR 633 million (US$ 16.2 million) and MUR 1161 million (US$ 29.6 million), respectively.ConclusionFiscal space creation through full technical efficiency, is estimated to represent 8.9 and 9.2% of GGHE in fiscal year 2021–2022 and 2022–2023, respectively. This will allow without any restrictions the funding of the national response for HIV, vaccine preventable diseases as well as building a resilient health system to mitigate impact of emerging infectious diseases as experienced with COVID-19.
Highlights
General Government Health Expenditure (GGHE) in Mauritius accounted for only 10% of General Government Expenditure for the fiscal year 2018
Fiscal space creation through full technical efficiency, is estimated to represent 8.9 and 9.2% of GGHE in fiscal year 2021–2022 and 2022–2023, respectively. This will allow without any restrictions the funding of the national response for HIV, vaccine preventable diseases as well as building a resilient health system to mitigate impact of emerging infectious diseases as experienced with COVID-19
This study asserts that public hospitals have relatively high technical efficiency score and increasing returns to scale
Summary
General Government Health Expenditure (GGHE) in Mauritius accounted for only 10% of General Government Expenditure for the fiscal year 2018 This is less than the pledge taken under the Abuja 2001 Declaration to allocate at least 15% of national budget to the health sector. A wide array of common sources for inefficiency have been identified These include inadequate controls on supply-chain agents, prescribers and dispensers; inadequate pharmaceutical regulatory structures/mechanisms; inappropriate hospital admissions and length of stay; asymmetric level of managerial resources for coordination and control with too many hospitals and inpatient beds in some areas and not enough in others; unclear resource allocation guidance; lack of transparency; poor accountability and governance mechanism; and inefficient mix for health interventions with resources skewed to curative services at the expenses of health promotion and prevention interventions [2, 3]
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