BackgroundBotswana national health policy states that the Ministry of Health shall from time to time review and revise its organization and management structures to respond to new developments and challenges in order to achieve and sustain a high level of efficiency in the provision of health care. Even though the government clearly views assuring efficiency in the health sector as one of its leadership and governance responsibilities, to date no study has been undertaken to measure the technical efficiency of hospitals which consume the majority of health sector resources. The specific objectives of this study were to quantify the technical and scale efficiency of hospitals in Botswana, and to evaluate changes in productivity over a three year period in order to analyze changes in efficiency and technology use.MethodsDEAP software was used to analyze technical efficiency along with the DEA-based Malmquist productivity index which was applied to a sample of 21 non-teaching hospitals in the Republic of Botswana over a period of three years (2006 to 2008).ResultsThe analysis revealed that 16 (76.2 percent), 16 (76.2 percent) and 13 (61.9 percent) of the 21 hospitals were run inefficiently in 2006, 2007 and 2008, with average variable returns to scale (VRS) technical efficiency scores of 70.4 percent, 74.2 percent and 76.3 percent respectively. On average, Malmquist Total Factor Productivity (MTFP) decreased by 1.5 percent. Whilst hospital efficiency increased by 3.1 percent, technical change (innovation) regressed by 4.5 percent. Efficiency change was thus attributed to an improvement in pure efficiency of 4.2 percent and a decline in scale efficiency of 1 percent. The MTFP change was the highest in 2008 (MTFP = 1.008) and the lowest in 2007 (MTFP = 0.963).ConclusionsThe results indicate significant inefficiencies within the sample for the years under study. In 2008, taken together, the inefficient hospitals would have needed to increase the number of outpatient visits by 117627 (18 percent) and inpatient days by 49415 (13 percent) in order to reach full efficiency. Alternatively, inefficiencies could have been reduced by transferring 264 clinical staff and 39 beds to health clinics, health posts and mobile posts. The transfer of excess clinical staff to those facilities which are closest to the communities may also contribute to accelerating progress towards the Millennium Development Goals related to child and maternal health.Nine (57.1 percent) of the 21 hospitals experienced MTFP deterioration during the three years. We found the sources of inefficiencies to be either adverse change in pure efficiency, scale efficiency and/or technical efficiency.In line with the report Health financing: A strategy for the African Region, which was adopted by the Fifty-sixth WHO Regional Committee for Africa, it might be helpful for Botswana to consider institutionalizing efficiency monitoring of health facilities within health management information systems.

The financing of health care is a complex issue for policy makers. This is because high out-ofpocket payments on health care have been found to further impoverish the poor who have limited income to divide among basic necessities of which health care is one-catastrophic health expenditure (CHE). The Millennium Development Goals (MDGs) may be difficult to attain with high out-of-pocket payments by the poor; this is an issue of serious concern and highlights the need for the kind of analyses in this paper. The analysis used data collected by the Our results showed that in Botswana the proportion of households facing CHE at the 20% and 40% thresholds was 11% and 7% respectively, and the share of out-of-pocket health payment during the survey period was about 0.93%. For Lesotho the proportions of those facing CHE expenditure at the 20% and 40% thresholds were 3.22% and 1.25%, and the share of out-of-pocket payment in total monthly expenditure was 1.34%. Results from regression analyses suggest that having at least one senior member in the household imposes a higher risk for CHE for the household in Lesotho; for Botswana gender and education status of households head influence the probability of facing CHE. In designing health systems, policy makers need to ensure that households are not only able to access health services when needed, but that they are also protected from facing financial catastrophe by reducing out-of-pocket payments.