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A Cross-Country Analysis of Health Care Expenditures

Author

Listed:
  • Alex R. Horenstein

    (School of Business, ITAM)

  • Manuel S. Santos

    (Department of Economics, University of Miami)

Abstract

This paper is concerned with growth patterns of US health care expenditures. Within a representative sample of OECD countries, we lay out a growth accounting exercise for health care expenditures to assess the influence of several explanatory variables. Our analysis demonstrates that the relative price of medical care and some health care laws can trace down fairly well the differential increase in US medical expenditures over the period 1970-2007. We then explore some major factors driving US medical care prices - including prescription drugs, the degree of competition, malpractice, and out-of-pocket expenditures. Some other explanatory variables - income growth, technological change, life expectancy, physicians' compensation, trends in aging population, and defensive medicine - would seem unable to account for the differential increase in US medical expenditures over various time periods.

Suggested Citation

  • Alex R. Horenstein & Manuel S. Santos, 2012. "A Cross-Country Analysis of Health Care Expenditures," Working Papers 2013-05, University of Miami, Department of Economics.
    • Handle: RePEc:mia:wpaper:2013-05
    as

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    File URL: https://www.herbert.miami.edu/_assets/files/repec/WP2013-05.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Health care expenditures; relative price of medical care; growth accounting; price elasticity; technological change; malpractice;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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