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Abstract

This study investigates the key drivers of inefficiency in the U.S. healthcare system at the county level, with a particular emphasis on the role of primary care physician (PCP) rates. Using a two-stage approach, Stochastic Frontier Analysis (SFA) models first estimate inefficiency separately for health outcomes and healthcare costs based on technical health system inputs. In the second stage, multivariate regression analysis examines the influence of socioeconomic factors on efficiency. The results indicate that preventative care efforts have the strongest impact on improving both healthcare outcomes and costs. Additionally, while inefficiencies in health outcomes and costs are not strongly correlated, the second-stage analysis highlights the critical role of socioeconomic factors in shaping overall healthcare efficiency.

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