Evaluation of Relative Efficiency in Health Care Expenditure: Case of Developing Countries

Efficiency is the missed part of a health sector in developing countries. Moreover، concerns about the Millennium Development Goals (MDGs) lead to specific attention for optimal use of limited resources in health sector. This study utilized data envelopment analysis (DEA) and linear programming methods to evaluate the efficiency of the government health expenditures from 2000 to 2008 for a sample of 88 developing countries. First of all، the countries were classified into two categories using cluster analysis method; and then، the efficiency analysis was applied separately for each group. In addition، by the use of multiple discriminant analysis (MDA)، the importance of each variable in the clustered groups was determined According to the cluster analysis، the first cluster composed of 49 countries and second cluster included 39 countries. MDA revealed that the infant mortality، mortality of children under 5 years، total fertility rate and life expectancy had a main role in disparity of the two clusters. Due to appropriate outputs، Iran took 16th rank among the first cluster countries. Measles vaccine is the most sensitive output in the first cluster countries due to appropriate performance in that indicator. In the second cluster، there was no country without sensitivity; in other words، these countries cannot achieve to the balanced growth in their health sector.