**The Efficiency of Post‐Communist Countries' Health Systems**

Justyna Kujawska

Additional information is available at the end of the chapter

http://dx.doi.org/10.5772/67817

#### **Abstract**

Health‐care costs are a major financial burden for the transition economies, which have experienced rapidly increasing demand for health‐care services. The former communist countries of the Central and Eastern Europe and Central Asia needed to reform the financ‐ ing of their health‐care systems and make efforts to strengthen the role of primary care while limiting the role of hospital care. The growing health needs and, consequently, costs resulted in the increased attention paid to the performance of health systems. The aim of this chapter is to determine the efficiency of health systems in post‐communist countries. The data envelopment analysis method was used. The effective health systems were iden‐ tified and recommendations for the inefficient countries were formulated.

**Keywords:** health‐care efficiency, post‐communist countries, data envelopment analysis

## **1. Introduction**

At the turn of the twentieth and twenty‐first centuries, both insurance‐ and provision‐based health systems underwent profound changes. Rising health‐care costs became a current eco‐ nomic, social and political problem. During this period, the post‐communist countries trans‐ formed their economies from command to market systems. Also, the health systems were transformed from the Semashko model to insurance model.

All countries regardless of their level of economic development endeavour to improve the quality and accessibility of health services, which requires objective and reliable assessment of the func‐ tioning of their health systems. Both policymakers and society expect the best possible outputs of the health systems, due to the relatively large expenditures allocated for their functioning [1].

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The efficiency of public organizations has become an area of practical measurement and sci‐ entific research. The evaluation of efficiency in terms of quantity should be the basic premise of making economic decisions. The more accurate it is, the more accurate and relevant are the information it provides.

Assessment of health systems should be carried out in two dimensions, where the *effectiveness* of the system reflects its success in achieving its objectives, whereas the *efficiency* reflects the success of transformation of inputs into outcomes [2]. In this study, the latter approach prevails.

International comparative studies of health systems often use, among other medical resources, health‐care spending measured as the share of gross domestic product (GDP) or per capita. It should be noted, however, that a constant share of health‐care spending in GDP over time does not mean that spending is constant, but rather that changes in health‐care spending are proportional to GDP changes [3].

Controlling spending on health care and the system of its financing is a priority aspect in designing public policy. The interest in this issue has increased in recent years as a result of the economic crisis and the need for financing health care with budget funds or by increasing the share of patients' private out‐of‐pocket expenditure [4].

An illness can cause lack of economic security both directly and indirectly. For those with‐ out or with partial health insurance, medical expenses can be devastating, leading to debt or opting out of treatment at the expense of worsening health in the future. Health insurance may cover different options, and even the insured individuals may incur high costs, paying directly for some services or medicines.

It should be noted, however, that the transformation of command economies proved more complicated than it was originally thought. Job insecurity, social inequality and the decline in spending on social and health insurance after the economic collapse contributed to the dete‐ rioration of health‐care outcomes.

The purpose of this chapter is to determine the efficiency of health‐care systems of post‐ communist countries. The study was conducted for the 28 countries of the former Eastern bloc for the years 2000 and 2013 using the method of data envelopment analysis (DEA). Averages of health indicators for the 16 economically developed countries of Western Europe were used as a benchmark.

The originality of this approach consists in focusing research on post‐communist countries, for which a small number of studies are carried out, as well as on conducting a broad discus‐ sion of projections, i.e. the necessary measures that must be taken to enable the countries which were in the Soviet sphere of influence after the Second World War to achieve such health results as in the case of the most developed European countries. Conducting research in multiple years allowed for verifying whether the actions taken within the framework of economy transition influence also the health systems.
