Efficiency of health care system and child health: Evidence from BIMARU states in India

Rapid economic progress over the last two decades has significantly improved the health status of population in India, but, the country still remains far behind in terms of meeting child health related Millennium Development Goals (MDG’s). India needs to tackle not only the overall poor child health status but also the wide regional, local, and socio-economic disparities especially across BIMARU (Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh) states.

This study aims to (1) identify states/regions that appear to be less successful (inefficient) in improving child health status, (2) identify factors that help improve child health at a relatively rapid rate in poor performing states, and (3) describe effects of potential determinants of child health in relatively efficient and inefficient states

Using fixed effect model, efficiency indices of 4 poor performing Indian States (in terms of child health outcomes – infant mortality rate) are estimated using state level data and various socio-economic variables serve as explanatory variables.

Preliminary analysis suggests that gains from investment on health and social services seem to be uneven, with some localities delivering lower health outcomes than others, even with comparable inputs. Results also indicate that exogenous factors have independent effect on the production of better child health outcomes.

Measurement of efficiency is of considerable significance to policy makers. First, it draws attention that a particular state may be able to achieve a higher level of health status without increasing its resource allocation to health, and second, it is then feasible to investigate exogenous determinants of efficiency.