Productive efficiency and its determinants in the Finnish Public Dental Service

Objective: Our objective was to investigate the cost efficiency of the Public Dental Service (PDS), which, until 2000, was responsible for organising dental care for children and younger adults born in 1956 and later. Methods: Input and output data and information on various organisational and environmental characteristics were collected from 228 municipal PDS units in Finland. First, non-parametric data envelopment analysis (DEA) was employed to assess efficiency. In the second stage, econometric Tobit analysis was used to explore various predictors of cost efficiency, technical efficiency and allocative efficiency. As input in the DEA model we used personnel full-time equivalents and material and other costs expressed in monetary terms, and as output we used the number of treated patients. Results: The study showed big differences in cost efficiency between the PDS units studied. The average cost inefficiency was 30%. Approximately two-thirds of the observed cost inefficiency was because of technical inefficiency and one-third because of allocative inefficiency. High state-subsidy levels, and a high proportion of young patients predicted inefficiency, and young population and low socioeconomic conditions in the municipality predicted efficiency. The results also indicated that many PDS units could have improved allocative efficiency by increasing the relative numbers of auxiliaries in relation to dentists. On the other hand, some units were too small to employ full-time dental hygienists efficiently. Conclusions: In the Finnish PDS, there are uncommitted resources that could be reallocated so as to improve overall efficiency.