Rajneel Narayan, Diviya Narayan, Rup Singh
Health system efficiency is one of the most sensitive and policy relevant topics in health economics. This study therefore assesses the efficiency of health systems during the contagious COVID-19 virus in 27 Small Island Developing States (SIDS) for the period 1 January 2020-31 December 2021, by employing a two-stage double bootstrap data envelopment analysis (DEA). The study is divided into three periods: initial containment, first wave, and the second wave period. In the first stage, technical efficiency scores are estimated using a Slack Based Measure (SBM) approach to DEA that considers undesirable outputs within a bootstrap environment. In the second stage, the double bootstrap DEA approach is employed to examine the non-discretionary factors influencing the COVID-19 response efficiency. We estimate the bias-corrected technical efficiency scores for all the three stages. This estimate suggests that the overall average efficiency in the SIDS has been about 84%. The bootstrap truncated regression indicates that while underlying health and demographic vulnerabilities constrain efficiency, improvements in education, economic capacity, and healthcare preparedness and response mechanisms are critical for enhancing health system performance during pandemics in SIDS. Sensitivity tests by a truncated quantile regression and a Tobit model are also discussed.