OBJECTIVES. The authors compute and compare productivity growth in the
health-care sectors for a sample of Organization for Economic Coopera
tion and Development countries over the period from 1974 to 1989. The
authors compute Malmquist productivity indexes, which allow productivi
ty growth to be decomposed into efficiency changes and technical chang
e. These indexes also allow the use of primary quantity data (recently
available from the Organization for Economic Cooperation and Developm
ent), rather than expenditure data, which the authors argue reduces bi
as resulting from distorted prices. METHODS. The authors specify two m
odels. The first model focuses on the hospital sector; inputs include
physicians and medical care beds, whereas outputs are the ''intermedia
te'' type used in hospital efficiency studies, namely, inpatient days
and discharges. RESULTS. For the 19 countries with complete data, the
authors found little productivity growth based on this model (with the
exception of Denmark, with 15.4% cumulated growth, and the United Sta
tes, with about 5% from 1974 to 1989). The authors did find, however,
that the highest productivity levels are found in the United States (I
taly and Finland were also on the frontier of technology in the base p
eriod, 1974). The second model uses the same inputs as the first (but
in per capita terms), but it specifies simple proxies of health outcom
es as outputs: life expectancy of women at age 40 and the reciprocal o
f the infant mortality rate. CONCLUSIONS. For the 10 countries with co
mplete data for this model, the authors found evidence of much more wi
despread and rapid productivity growth: Denmark's cumulated growth was
close to 33%, with the United States close behind. In both these coun
tries, this growth was due solely to technical change over this period
.