Health System Efficiency in European Countries: Network Data Envelopment Analysis Approach

Purpose: The article's main aim is to investigate the effectiveness of health systems in European countries based on EUROSTAT data. A comparative analysis of the health systems' effectiveness in different countries is based on their improvement (reform), using the best practices approach. Design/Methodology/Approach: The network DEA model and a slack-based model (NDEA – SBM) are used. A non-oriented model is used. The research sample covers 30 countries (28 EU plus Norway and Island). The health system considers two factors: lifestyle (LF) and primary medical care resources (MC). Lifestyle factors included, alcohol consumption, smoking, and being overweight. The primary resources of medical care are medical personnel, hospital beds, and finances. The subjective assessment of health status and healthy life expectancy is taken as direct outputs. As an intermediate product (link), the expenditure on prevention is assumed as a percentage of GDP. Findings: Health systems in five countries are identified as fully efficient. These countries have also achieved total efficiency for both divisions, lifestyle factors and medical care. The average efficiency of health systems for all countries is low and amounts to 0.619, and the average efficiency for the LF division is 0.580, with huge variations between countries. In the MC division, the average efficiency for all countries is 0.72. However, the difference between countries is more minor. For inefficient countries, the projection of necessary changes to achieve total efficiency has been calculated. Practical Implications: The network DEA model allows a better understanding of the functioning of the complex health care system by analyzing the effectiveness of two separate areas (lifestyle and health care). The values of the forecasted variables are also determined, inputs, outputs, and the linking variable that may help determine priority actions in the field of improving the efficiency of health systems. Originality/value: This paper contributes to the literature by applying the network model to assess the effectiveness of health systems. It enables simultaneous research of various areas related to health. Few publications have attempted to use the network model in the area of health protection.