Evaluating Public Healthcare Productivity and Health System Efficiency in the State of Kuwait: A Two-Stage Data Envelopment Analysis of Government Hospital Performance

Abstract

The healthcare sector in Kuwait has been nurtured for many decades by the government where the Ministry of Health (MoH) controls up to 80 percent of the country’s health services. General and specialized public hospitals represent a significant proportion of health expenditures in Kuwait; amidst dwindling health resources, a declining global oil market in an oil-dependent welfare state, and a heavy reliance on a non-national clinical workforce. Although healthcare services in public sector hospitals are at highly subsidized rates, causing private sector involvement in healthcare to be considerably low, the growing demands for private delivery of care burgeoned participation of private hospitals in Kuwait, and improving hospital efficiency and productivity is more critical and timelier than ever. This paper aims to analyze public health system efficiency and hospital performance in the State of Kuwait, where we begin by evaluating the input-oriented technical efficiency (TE) of MoH hospitals in 2015-2019 and identifying potential areas for efficiency improvement by exploring influencing institutional and environmental factors. Over the five years between 2015 and 2019, TE in MoH hospitals has decreased by an average of 2.98% solely based on technical regress, where the six MoH general hospitals reported a pooled mean efficiency of 86.58%, and the nine sampled MoH specialized hospitals had a five-year pooled average of 65.47% efficiency. MoH policymakers should focus on improving allocative efficiency in the public health system, and healthcare policy reforms should focus on strengthening management structures in Kuwait’s public hospitals to improve production efficiency and financial sustainability.