Do healthcare financing systems influence hospital efficiency? A metafrontier approach for the case of Mexico

The objective of this article is to discuss the impact of healthcare financing systems on the efficiency of Mexican hospitals. The
Mexican healthcare system is undergoing a process of transformation to establish conditions for allocating limited health
resources in order to achieve efficiency and transparency; in this line, there is a concern about the implications of different
funding options. In terms of financing arrangements, the Mexican health system is divided into three categories (one private and
two public). In the framework of New Public Management theory, non-parametric metafrontier methods are used to estimate
differences in efficiency of hospitals under different financing schemes, and in relation to the potential technology available in the
healthcare system. Empirical evidence suggests that: 1) an out-of-pocket funding system, on average, incentivizes more efficient
behavior; and 2) public funding seems to be the best option for complex and high-technology hospitals, and capitation appears to
be the most appropriate way of negotiating their funding.