IDEAS home Printed from https://ideas.repec.org/a/gam/jijerp/v17y2020i6p1928-d332943.html
   My bibliography  Save this article

The Impact of Business Cycle on Health Financing: Subsidized, Voluntary and Out-of-Pocket Health Spending

Author

Listed:
  • Hao Dong

    (School of Economics and Statistics, Guangzhou University, Guangzhou 510006, China)

  • Zhenghui Li

    (Guangzhou International Institute of Finance and Guangzhou University, Guangzhou 510006, China)

  • Pierre Failler

    (Economics and Finance Group, Portsmouth Business School, University of Portsmouth, Portsmouth PO1 3DE, UK)

Abstract

Diverse types of healthcare systems in countries offer opportunities to explore the heterogeneous sources of health financing. This paper widely explores the effect of the business cycle on subsidized, voluntary and out-of-pocket health spending in 34 countries with different types of healthcare systems, by the methodology of hierarchical linear modeling (HLM). We use a panel of annual data during the years from 2000 to 2016. It further examines the business cycle-health financing mechanism by inquiring into the mediating effect of external conditions and innovative health financing, based on the structural equation modeling (SEM). The empirical results reveal that the business cycle harms subsidized spending, whereas its effect on voluntary and protective health spending is positive. Results related to the SEM indicate that the mediating effect of external conditions on the relationship between the business cycle and health financing is negative. However, we find that the business cycle plays a positive effect on health financing through innovative health financing channels. Thus, designing and implementing efforts to shift innovative health financing have substantial effects on the sustainability of healthcare systems.

Suggested Citation

  • Hao Dong & Zhenghui Li & Pierre Failler, 2020. "The Impact of Business Cycle on Health Financing: Subsidized, Voluntary and Out-of-Pocket Health Spending," IJERPH, MDPI, vol. 17(6), pages 1-24, March.
    • Handle: RePEc:gam:jijerp:v:17:y:2020:i:6:p:1928-:d:332943
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1660-4601/17/6/1928/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1660-4601/17/6/1928/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Tomoki Fujii, 2018. "Sources of health financing and health outcomes: A panel data analysis," Health Economics, John Wiley & Sons, Ltd., vol. 27(12), pages 1996-2015, December.
    2. Vasco M. Carvalho & Basile Grassi, 2019. "Large Firm Dynamics and the Business Cycle," American Economic Review, American Economic Association, vol. 109(4), pages 1375-1425, April.
    3. Huang, Zhehao & Liao, Gaoke & Li, Zhenghui, 2019. "Loaning scale and government subsidy for promoting green innovation," Technological Forecasting and Social Change, Elsevier, vol. 144(C), pages 148-156.
    4. Shivendra Sangar & Varun Dutt & Ramna Thakur, 2019. "Economic burden, impoverishment, and coping mechanisms associated with out‐of‐pocket health expenditure in India: A disaggregated analysis at the state level," International Journal of Health Planning and Management, Wiley Blackwell, vol. 34(1), pages 301-313, January.
    5. Adam Wagstaff, 2002. "Reflections on and alternatives to WHO's fairness of financial contribution index," Health Economics, John Wiley & Sons, Ltd., vol. 11(2), pages 103-115, March.
    6. Reeves, Aaron & McKee, Martin & Basu, Sanjay & Stuckler, David, 2014. "The political economy of austerity and healthcare: Cross-national analysis of expenditure changes in 27 European nations 1995–2011," Health Policy, Elsevier, vol. 115(1), pages 1-8.
    7. Steven Deller & Philip Watson, 2016. "Did Regional Economic Diversity Influence The Effects Of The Great Recession?," Economic Inquiry, Western Economic Association International, vol. 54(4), pages 1824-1838, October.
    8. Hyacinthe Tchewonpi Kankeu & Sylvie Boyer & Raoul Fodjo Toukam & Mohammad Abu-Zaineh, 2016. "How do supply-side factors influence informal payments for healthcare? The case of HIV patients in Cameroon," International Journal of Health Planning and Management, Wiley Blackwell, vol. 31(1), pages 41-57, January.
    9. McIntyre, Diane & Thiede, Michael & Dahlgren, Göran & Whitehead, Margaret, 2006. "What are the economic consequences for households of illness and of paying for health care in low- and middle-income country contexts?," Social Science & Medicine, Elsevier, vol. 62(4), pages 858-865, February.
    10. Marianne Bitler & Hilary Hoynes, 2015. "Heterogeneity in the Impact of Economic Cycles and the Great Recession: Effects within and across the Income Distribution," American Economic Review, American Economic Association, vol. 105(5), pages 154-160, May.
    11. Garber, Alan M. & Phelps, Charles E., 1997. "Economic foundations of cost-effectiveness analysis," Journal of Health Economics, Elsevier, vol. 16(1), pages 1-31, February.
    12. Zhenghui Li & Gaoke Liao & Khaldoon Albitar, 2020. "Does corporate environmental responsibility engagement affect firm value? The mediating role of corporate innovation," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 1045-1055, March.
    13. Watson, Philip & Deller, Steven, 2017. "Economic diversity, unemployment and the Great Recession," The Quarterly Review of Economics and Finance, Elsevier, vol. 64(C), pages 1-11.
    14. Reyes-Heroles, Ricardo & Tenorio, Gabriel, 2019. "Regime-switching in emerging market business cycles: Interest rate volatility and sudden stops," Journal of International Money and Finance, Elsevier, vol. 93(C), pages 81-100.
    15. Shuanglian Chen & Zhehao Huang & Benjamin M. Drakeford & Pierre Failler, 2019. "Lending Interest Rate, Loaning Scale, and Government Subsidy Scale in Green Innovation," Energies, MDPI, vol. 12(23), pages 1-22, November.
    16. Beatriz G. Lopez-Valcarcel & Patricia Barber, 2017. "Economic Crisis, Austerity Policies, Health and Fairness: Lessons Learned in Spain," Applied Health Economics and Health Policy, Springer, vol. 15(1), pages 13-21, February.
    17. Juliane Begenau & Juliana Salomao, 2019. "Firm Financing over the Business Cycle," Review of Financial Studies, Society for Financial Studies, vol. 32(4), pages 1235-1274.
    18. Rechel, Boika & Suhrcke, Marc & Tsolova, Svetla & Suk, Jonathan E. & Desai, Monica & McKee, Martin & Stuckler, David & Abubakar, Ibrahim & Hunter, Paul & Senek, Michaela & Semenza, Jan C., 2011. "Economic crisis and communicable disease control in Europe: A scoping study among national experts," Health Policy, Elsevier, vol. 103(2), pages 168-175.
    19. Isabel Aguilar-Palacio & Patricia Carrera-Lasfuentes & M. Rabanaque, 2015. "Youth unemployment and economic recession in Spain: influence on health and lifestyles in young people (16–24 years old)," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 60(4), pages 427-435, May.
    20. Shivendra Sangar & Varun Dutt & Ramna Thakur, 2019. "Distress financing of out‐of‐pocket health expenditure in India," Review of Development Economics, Wiley Blackwell, vol. 23(1), pages 314-330, February.
    21. Tetsuji Yamada & Chia-Ching Chen & Chiyoe Murata & Hiroshi Hirai & Toshiyuki Ojima & Katsunori Kondo & Joseph R. Harris III, 2015. "Access Disparity and Health Inequality of the Elderly: Unmet Needs and Delayed Healthcare," IJERPH, MDPI, vol. 12(2), pages 1-28, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, Zhenghui & Chen, Liming & Dong, Hao, 2021. "What are bitcoin market reactions to its-related events?," International Review of Economics & Finance, Elsevier, vol. 73(C), pages 1-10.
    2. Xi, Xun & Xi, Baoxing & Miao, Chenglin & Yu, Rongjian & Xie, Jie & Xiang, Rong & Hu, Feng, 2022. "Factors influencing technological innovation efficiency in the Chinese video game industry: Applying the meta-frontier approach," Technological Forecasting and Social Change, Elsevier, vol. 178(C).
    3. Qi, Xiulin & Wu, Zhifang & Xu, Jinqing & Shan, Biaoan, 2023. "Environmental justice and green innovation: A quasi-natural experiment based on the establishment of environmental courts in China," Ecological Economics, Elsevier, vol. 205(C).
    4. He, Feng & Yan, Yulin & Hao, Jing & Wu, Ji (George), 2022. "Retail investor attention and corporate green innovation: Evidence from China," Energy Economics, Elsevier, vol. 115(C).
    5. Chen, Yang & Cheng, Liang & Lee, Chien-Chiang & Wang, Chang-song, 2021. "The impact of regional banks on environmental pollution: Evidence from China's city commercial banks," Energy Economics, Elsevier, vol. 102(C).
    6. Hao Liu & Weilun Huang, 2022. "Sustainable Financing and Financial Risk Management of Financial Institutions—Case Study on Chinese Banks," Sustainability, MDPI, vol. 14(15), pages 1-18, August.
    7. Ran Zhang & Guoquan Kong & Huaping Sun, 2023. "Can New-Type Urbanization Promote Enterprise Green Technology Innovation?—A Study Based on Difference-in-Differences Model," Sustainability, MDPI, vol. 15(7), pages 1-20, April.
    8. Raúl Del Pozo-Rubio & Isabel Pardo-García & Francisco Escribano-Sotos, 2020. "Financial Catastrophism Inherent with Out-of-Pocket Payments in Long Term Care for Households: A Latent Impoverishment," IJERPH, MDPI, vol. 17(1), pages 1-19, January.
    9. Fei Tang, 2021. "Busting the ‘Princeling’? Demystifying the Effect of Corporate Depoliticization on Green Innovation: The Moderating Effect of Politician Turnover," Sustainability, MDPI, vol. 13(17), pages 1-21, August.
    10. Debao Dai & Yaodong Fan & Guangyu Wang & Jiaping Xie, 2022. "Digital Economy, R&D Investment, and Regional Green Innovation—Analysis Based on Provincial Panel Data in China," Sustainability, MDPI, vol. 14(11), pages 1-21, May.
    11. Dezhong Duan & Qifan Xia, 2021. "Does Environmental Regulation Promote Environmental Innovation? An Empirical Study of Cities in China," IJERPH, MDPI, vol. 19(1), pages 1-18, December.
    12. Chuanlin Wang & Guowan Yan & Juan Ou, 2023. "Does Digitization Promote Green Innovation? Evidence from China," IJERPH, MDPI, vol. 20(5), pages 1-27, February.
    13. Xun Zhang & Biao Xu, 2019. "R&D Internationalization and Green Innovation? Evidence from Chinese Resource Enterprises and Environmental Enterprises," Sustainability, MDPI, vol. 11(24), pages 1-18, December.
    14. Xiao Yan Zhou & Ben Caldecott & Andreas G. F. Hoepner & Yao Wang, 2022. "Bank green lending and credit risk: an empirical analysis of China's Green Credit Policy," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1623-1640, May.
    15. Yue Liu & Pierre Failler & Liming Chen, 2021. "Can Mandatory Disclosure Policies Promote Corporate Environmental Responsibility?—Quasi-Natural Experimental Research on China," IJERPH, MDPI, vol. 18(11), pages 1-19, June.
    16. Xiaohua Li & Lina Ma & Salahuddin Khan & Xin Zhao, 2023. "The Role of Education and Green Innovation in Green Transition: Advancing the United Nations Agenda on Sustainable Development," Sustainability, MDPI, vol. 15(16), pages 1-20, August.
    17. Jing Chen, 2018. "Interpreting Economic Diversity as the Presence of Multiple Specializations," Working Papers Working Paper 2018-02, Regional Research Institute, West Virginia University.
    18. Fang, Zhenming & Kong, Xiaoran & Sensoy, Ahmet & Cui, Xin & Cheng, Feiyang, 2021. "Government’s awareness of Environmental protection and corporate green innovation: A natural experiment from the new environmental protection law in China," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 294-312.
    19. Lingli Qing & Dongphil Chun & Abd Alwahed Dagestani & Peng Li, 2022. "Does Proactive Green Technology Innovation Improve Financial Performance? Evidence from Listed Companies with Semiconductor Concepts Stock in China," Sustainability, MDPI, vol. 14(8), pages 1-20, April.
    20. Qihang Xue & Caiquan Bai & Weiwei Xiao, 2022. "Fintech and corporate green technology innovation: Impacts and mechanisms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3898-3914, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijerp:v:17:y:2020:i:6:p:1928-:d:332943. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.