Measuring and Assessing the Wealth Influence on the Efficiency of the Health System through the Private Sector

Abstract

The aim of the paper is to provide an analysis of the dynamics of the public and private health sectors in Romania. Using descriptive statistics, it first investigates whether the public health sector follows the reformation trends suggested by official strategies and reports, and to what extent the private health sector is a viable alternative to the public one, by analysing the demand for private inpatient services. We look into the reduction in the occupancy degree in public hospitals as a means to increase the efficiency of public health expenditures, which represents one way to reform the public health sector. We also find that the increase in the occupancy degree in private hospitals is negatively correlated with the quality of services provided by public hospitals, but positively correlated with population wealth. Increase in the occupancy degree in private hospitals is an indicator of poor quality of services in public hospitals. It can also be explained by increasing expectations and requirements of beneficiaries as a reflection of increase in wealth and of their will to preserve their health capital. Using regression models, the paper then proposes the Wealth-Health Index, a composite indicator to explore the connection between wealth and health and the dynamics of the private health sector. Investment in physical infrastructure and the size of medical staff in the private sector is positively correlated with wealth increase.