Efficiency and Spatial Structure of the Public Healthcare System: The Ecuadorian Case

Abstract

During the past decade, Ecuador has been going through many reforms focused on promoting equity-based and universal healthcare coverage goals. However, equity-based decisions can affect the efficient performance of the healthcare system, as more demand for medical care will require higher use of healthcare resources. The importance to care for the efficient performance then is drawn to attention. In this thesis, we propose to assess the efficiency performance of Ecuadorian public hospitals; given the marked regional heterogeneity that characterizes the Ecuadorian reality, we propose a framework of analysis where the spatial structure plays a key role to understand and shape the heterogeneous distribution of resources and its determinants. First, we focus on the efficiency measurement of public hospitals, developing a new empirical methodology that takes into account the heterogeneity of the system. Then, we answer whether efficiency variation in a hospital affects the efficiency of neighboring hospitals and whether demand variations affect hospital efficiency. Finally, we will disentangle to what extent the efficient performance of public hospitals is determining interregional patient mobility, and whether it has an indirect effect on other (spatially correlated) hospitals. We conclude that the increase in the demand for medical treatment had an overall positive effect on hospital performance, both through direct and spillover effects. Potential drivers of this effect refer to the inefficient use of the spare resources and capacity of public hospitals. The time that hospitals had to adapt to the forthcoming inflow of patients before the reforms and the public investment deployed may also have significant participation in the effect. The results also provide evidence that the efficiency performance of specialized hospitals has a strong pulling effect on patients from less-developed regions. This inflow of patients is being captured by neighboring hospitals who are increasing their efficiency to attract this demand, showing evidence of competition. Policy implications drive the attention to the design of well planned healthcare strategies considering territorial externalities, technological endowment and specialization level as key features. Higher public investment can be targeted to increase the supply of specialized treatment in less-developed regions. In developed ones, decision-makers can take advantage of spillover effects to promote efficiency strengthening hospital reforms and well allocated public investment to enhance the regional healthcare system’s performance.

Date of Award	27 Sept 2021
Original language	English
Supervisor	Diego Prior Jimenez (Director) & Rosella Nicolini (Director)