Health care expenditure inertia in the OECD countries: A heterogeneous analysis
AbstractHealth care expenditure studies of the Organization for Economic Cooperation and Development (OECD) countries remain important because their findings often suggest cost containment and other policy initiatives. This paper focuses on the compatibility of OECD health data with the “expenditure inertia” (or lagged adjustments) hypothesis, by modeling individual country time‐series data of 21 nations for the 1960–1993 period. Maximum likelihood estimates of the Box–Cox transformation regression models reveal that: (a) the hypothesized impact of health “expenditure inertia” is both pervasive and strong, averaging 0.64 across the countries; (b) the real GDP elasticities of health care expenditures vary widely among the countries and average 0.34 in the short run – implying that health care is a necessity; (c) the long run GDP elasticities are less than 1 in 8 countries, unitary elastic in 8 countries and elastic in 5 countries – suggesting that health care is not universally a necessity or a luxury commodity for the OECD countries; (d) physician‐inducement effects (dis‐inducement in a few countries) are weak, with a mean elasticity estimate of 0.17; and (e) no unique functional form approximation model is globally compatible with the data across the countries. Health care cost containment policy implications of these findings are explored. Copyright Kluwer Academic Publishers 2000
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Springer in its journal Health Care Management Science.
Volume (Year): 3 (2000)
Issue (Month): 1 (January)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=101767
health care expenditures; OECD countries; expenditure inertia; physician‐induced demand;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Costa-Font, J & Gemmill M & Rubert G, 2009.
"Re-visiting the Health Care Luxury Good Hypothesis: Aggregation, Precision, and Publication Biases?,"
Health, Econometrics and Data Group (HEDG) Working Papers
09/02, HEDG, c/o Department of Economics, University of York.
- Joan Costa-Font & Marin Gemmill & Gloria Rubert, 2008. "Re-visiting the Health Care Luxury Good Hypothesis: Aggregation, Precision, and Publication Biases?," Working Papers in Economics 197, Universitat de Barcelona. Espai de Recerca en Economia.
- Mohan, Ramesh & Mirmirani, Sam, 2007. "An Assessment of OECD Health Care System Using Panel Data Analysis," MPRA Paper 6122, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.