Hospitals are a key component of health systems and health spending in Latin America and the Caribbean (LAC). Across the region, hospital care already accounts for about 1/3 of total health spending and is expected to increase in absolute and relative terms as populations age and medical technology improves. The public sector has a substantial role in providing and paying for hospital services, through ownership and management of public hospitals and through public insurance schemes.
How well do hospitals perform? Here are some highlights from our analysis of administrative data from public hospitals in four health systems with regard to efficiency (average length of stay) and quality (using the rate of Cesarean sections as an indicator of appropriateness) of hospitals.
What Is Hospital Performance and How Is It Measured?
Efficiency and quality are two key dimensions of performance. Efficiency is about getting the most value for our spending. Quality includes several dimensions, such as effectiveness (providing evidence-based healthcare to those who need it), safety (preventing and reducing harm), and patient-centeredness (whether care is responsive to patient needs). While some indicators require a lot of detailed data, many health systems can already examine basic indicators.
Thus we find that public hospitals have great potential to improve their efficiency and quality. The graph below shows, for example, that Brazil has a C-section rate of 55.9%, which is higher than the rate of Mexico, Peru and Ecuador; it is also higher than the OECD average of 29% in 2019.
There is also substantial variation within countries. In the same graph, each dot we see is a state or department within a country. All health systems have higher and lower-performing states. There are legitimate reasons for this variability, such as different disease profiles and local contexts. In some states, hospitals may also be compensating for underperforming primary care. Conversely, if there are barriers to access, some hospitals may receive the most challenging patients, who may be at high risk of death or require longer stays or cesarean sections. Even taking these factors into account, the wide variation among entities suggests ample room for improvement.
Variation in public hospital efficiency and quality across regions and states (2015-2019)
What Could Be Gained with Better Performance?
The table below shows a rough estimate of what could be expected if variations among subnational entities were reduced. For this estimate, we assume that all states performed well, as well as a state that performs well but is not the best performer. We see that there are large potential gains.
Potential gains (simulation)
| Efficiency | Quality | ||
| Hospital bed-days | C-sections | ||
| Benchmark | 25th percentile | 25th percentile | 15% (WHO) |
| Total | |||
| Brazil | 5,922,778 | 220,951 | 1,139,196 |
| Ecuador | 916,656 | 16,370 | 45,632 |
| Mexico | 3,531,998 | 50,431 | 328,690 |
| Peru | 1,610,587 | 30,977 | 76,767 |
| Percentage | |||
| Brazil | 9.7% | 14.0% | 72.3% |
| Ecuador | 27.2% | 22.2% | 61.8% |
| Mexico | 17.1% | 9.4% | 61.2% |
| Peru | 40.0% | 21.7% | 53.8% |
For example, Ecuador could save about 917,000 (27.2%) bed days, and Brazil could have 220,000 (14%) fewer C-sections. If we were to use a stricter comparison—such as the WHO recommendation that only 15% of deliveries should be by cesarean section—the potential gains would be even larger.
How to realize these gains? Improving hospital performance would benefit everyone. There are many policy levers that countries can use, beginning with systematic and routine measurement of key indicators. Even simple indicators, like those shown in this blog, can be very informative and motivating. It is also critical to improve governance and management and to align all components of the health system to promote performance, from foundational rules and regulations to payment systems and hospital management.
Learn more strategies and tools for more efficient healthcare spending in our publication Smart Spending for Health: How to Make Each Dollar Count.
Leave a Reply