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US Health Care Expenditures, GDP and Health Policy Reforms: Evidence from End-of-Sample Structural Break Tests

Author

Listed:
  • Ben Brewer

    (University of Hartford)

  • Karen Smith Conway

    (University of New Hampshire)

  • Deniz Ozabaci

    (University of New Hampshire)

  • Robert S. Woodward

    (University of New Hampshire)

Abstract

This research investigates the over-time stability of the aggregate US healthcare expenditure (HCE)–GDP relationship, focusing on periods of healthcare reforms. The most consequential reforms—Medicaid/Medicare and the Affordable Care Act (ACA)—are challenging to study because they occur near the ends of the available data. Using annual national- and state-level data and a battery of structural break tests, we find the HCE–GDP relationship to be overwhelmingly stable. An ancillary analysis around the 2006 Massachusetts healthcare reform, which avoids the confounding effects of the Great Recession and the staggered rollout of the ACA, likewise finds no change.

Suggested Citation

  • Ben Brewer & Karen Smith Conway & Deniz Ozabaci & Robert S. Woodward, 2022. "US Health Care Expenditures, GDP and Health Policy Reforms: Evidence from End-of-Sample Structural Break Tests," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 48(4), pages 451-487, October.
    • Handle: RePEc:pal:easeco:v:48:y:2022:i:4:d:10.1057_s41302-022-00218-x
    DOI: 10.1057/s41302-022-00218-x
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    More about this item

    Keywords

    US health care expenditure; GDP; Income elasticity of health care; Multiple structural changes;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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