Health care service provision in Europe and regional diversity: A stochastic metafrontier approach

In the last decades, demographic change coupled with new and expensive medical innovations have put most health care systems in developed countries under financial pressure. Therefore, ensuring efficient service provision is essential for a sustainable health care system. This paper investigates the performance of regional health care services in six West European countries between 2005 and 2014. We apply a stochastic metafrontier model to capture the different conditions in the health care systems in the countries within the European Union. By means of this approach, it is possible to detect performance differences in the European health care systems subject to different conditions and technologies relative to the potential technology available. The results indicate that regional deprivation plays a key role for the efficiency of health care provision. Furthermore, a pooled model which assumes a similar technology for all countries cannot sufficiently account for differences between countries. Surprisingly, the Scandinavian regions lag behind other regions with respect to the metafrontier.