IDEAS home Printed from https://ideas.repec.org/a/wly/hlthec/v18y2009i1p55-70.html
   My bibliography  Save this article

The convergence of health care expenditure in the US states

Author

Listed:
  • Zijun Wang

Abstract

In response to rising health care costs, many have called for more effective regional health policy coordination. In this paper, we address the issue by examining the degree of convergence in per capita health care expenditure and its nine components across the US states from 1980 to 2004. The major finding is the moderate evidence of convergence in total health care expenditure and the diverse performance of the expenditure components regarding convergence. We also find hospital care to be responsible for the bulk of cross‐state convergence in total expenditure. The expenditure on prescription drugs is the most important diverging factor. Policy implications of these empirical results are discussed. Copyright © 2008 John Wiley & Sons, Ltd.

Suggested Citation

  • Zijun Wang, 2009. "The convergence of health care expenditure in the US states," Health Economics, John Wiley & Sons, Ltd., vol. 18(1), pages 55-70, January.
    • Handle: RePEc:wly:hlthec:v:18:y:2009:i:1:p:55-70
    DOI: 10.1002/hec.1343
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/hec.1343
    Download Restriction: no
    File URL: https://libkey.io/10.1002/hec.1343?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. John Nixon, "undated". "Convergence Analysis of Health Care Expenditure in the EU Countries Using Two Approaches," Discussion Papers 99/3, Department of Economics, University of York.
    2. Bernard, Andrew B & Jones, Charles I, 1996. "Productivity across Industries and Countries: Time Series Theory and Evidence," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 135-146, February.
    3. Theo Hitiris & John Nixon, 2001. "Convergence of health care expenditure in the EU countries," Applied Economics Letters, Taylor & Francis Journals, vol. 8(4), pages 223-228.
    4. Phelps, Charles E., 2000. "Information diffusion and best practice adoption," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 5, pages 223-264, Elsevier.
    5. Okunade, Albert A. & Murthy, Vasudeva N. R., 2002. "Technology as a 'major driver' of health care costs: a cointegration analysis of the Newhouse conjecture," Journal of Health Economics, Elsevier, vol. 21(1), pages 147-159, January.
    6. Luisa Corrado & Ron Martin & Melvyn Weeks, 2005. "Identifying and Interpreting Regional Convergence Clusters across Europe," Economic Journal, Royal Economic Society, vol. 115(502), pages 133-160, March.
    7. Julie Lee & Mark McClellan & Jonathan Skinner, 1999. "The Distributional Effects of Medicare," NBER Chapters, in: Tax Policy and the Economy, Volume 13, pages 85-108, National Bureau of Economic Research, Inc.
    8. Rettenmaier, Andrew J. & Wang, Zijun, 2006. "Persistence in Medicare reimbursements and personal medical accounts," Journal of Health Economics, Elsevier, vol. 25(1), pages 39-57, January.
    9. Theo Hitiris, 1997. "Health care expenditure and integration in the countries of the European Union," Applied Economics, Taylor & Francis Journals, vol. 29(1), pages 1-6.
    10. Boyle, G E & McCarthy, T G, 1997. "A Simple Measure of Beta-Convergence," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 59(2), pages 257-264, May.
    11. Skinner Jonathan & Wennberg John E., 2000. "Regional Inequality in Medicare Spending: The Key to Medicare Reform?," Forum for Health Economics & Policy, De Gruyter, vol. 3(1), pages 1-24, January.
    12. Zijun Wang & Andrew J. Rettenmaier, 2007. "A note on cointegration of health expenditures and income," Health Economics, John Wiley & Sons, Ltd., vol. 16(6), pages 559-578, June.
    13. Dan Ben-David & Robin L. Lumsdaine & David H. Papell, 2003. "Unit roots, postwar slowdowns and long-run growth: Evidence from two structural breaks," Empirical Economics, Springer, vol. 28(2), pages 303-319, April.
    14. Bart Hobijn & Philip Hans Franses, 2000. "Asymptotically perfect and relative convergence of productivity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(1), pages 59-81.
    15. Joseph P. Newhouse, 1992. "Medical Care Costs: How Much Welfare Loss?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 3-21, Summer.
    16. C Michelacci & Paolo Zaffaroni, 1997. "Beta Convergence," STICERD - Econometrics Paper Series 332, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    17. Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-1085, December.
    18. A. J. Culyer & J. P. Newhouse (ed.), 2000. "Handbook of Health Economics," Handbook of Health Economics, Elsevier, edition 1, volume 1, number 1.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Andrea Leiter & Engelbert Theurl, 2012. "The convergence of health care financing structures: empirical evidence from OECD-countries," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(1), pages 7-18, February.
    2. Guglielmo Maria Caporale & Juncal Cunado & Luis A. Gil-Alana & Rangan Gupta, 2018. "The relationship between healthcare expenditure and disposable personal income in the US states: a fractional integration and cointegration analysis," Empirical Economics, Springer, vol. 55(3), pages 913-935, November.
    3. Sundar S Shrestha & Theodore J Thompson & Karen A Kirtland & Edward W Gregg & Gloria L Beckles & Elizabeth T Luman & Lawrence E Barker & Linda S Geiss, 2016. "Changes in Disparity in County-Level Diagnosed Diabetes Prevalence and Incidence in the United States, between 2004 and 2012," PLOS ONE, Public Library of Science, vol. 11(8), pages 1-16, August.
    4. Jiajie Jin & Di Liang & Lu Shi & Jiayan Huang, 2016. "Trends in Between-Country Health Equity in Sub-Saharan Africa from 1990 to 2011: Improvement, Convergence and Reversal," IJERPH, MDPI, vol. 13(6), pages 1-15, June.
    5. Claudiu Tiberiu Albulescu, 2022. "Health Care Expenditure in the European Union Countries: New Insights about the Convergence Process," IJERPH, MDPI, vol. 19(4), pages 1-16, February.
    6. Ekaterini Panopoulou & Theologos Pantelidis, 2013. "Cross‐State Disparities In Us Health Care Expenditures," Health Economics, John Wiley & Sons, Ltd., vol. 22(4), pages 451-465, April.
    7. Nicholas Apergis & Tsangyao Chang & Christina Christou & Rangan Gupta, 2017. "Convergence of Health Care Expenditures Across the US States: A Reconsideration," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 133(1), pages 303-316, August.
    8. Julio Pombo-Romero & Luis Varela & Carlos Ricoy, 2013. "Diffusion of innovations in social interaction systems. An agent-based model for the introduction of new drugs in markets," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(3), pages 443-455, June.
    9. Sedat Alataş & Erkam Sarı, 2021. "An Empirical Investigation on Regional Disparities in Public Expenditures: Province Level Evidence from Turkey," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(1), pages 217-240, November.
    10. Wen-Yi CHEN & Yu-Hui LIN, 2016. "Co-Movement of Healthcare Financing in OECD Countries: Evidence from Discrete Wavelet Analyses," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 40-56, September.
    11. Carla Blazquez-Fernandez & David Cantarero & Patricio Perez, 2014. "Disentangling the heterogeneous income elasticity and dynamics of health expenditure," Applied Economics, Taylor & Francis Journals, vol. 46(16), pages 1839-1854, June.
    12. Jay Pan & Peng Wang & Xuezheng Qin & Shufang Zhang, 2013. "Disparity and Convergence: Chinese Provincial Government Health Expenditures," PLOS ONE, Public Library of Science, vol. 8(8), pages 1-6, August.
    13. José Villaverde & Adolfo Maza & María Hierro, 2014. "Health care expenditure disparities in the European Union and underlying factors: a distribution dynamics approach," International Journal of Health Economics and Management, Springer, vol. 14(3), pages 251-268, September.
    14. Wen-Yi Chen, 2013. "Does healthcare financing converge? Evidence from eight OECD countries," International Journal of Health Economics and Management, Springer, vol. 13(3), pages 279-300, December.
    15. Jesús Clemente & Angelina Lázaro-Alquézar & Antonio Montañés, 2020. "Does the Great Recession Contribute to the Convergence of Health Care Expenditures in the US States?," IJERPH, MDPI, vol. 17(2), pages 1-7, January.
    16. Clemente, Jesús & Lázaro-Alquézar, Angelina & Montañés, Antonio, 2019. "Convergence in Spanish Public health expenditure: Has the decentralization process generated disparities?," Health Policy, Elsevier, vol. 123(5), pages 503-507.
    17. Clemente, Jesús & Lázaro-Alquézar, Angelina & Montañés, Antonio, 2019. "US state health expenditure convergence: A revisited analysis," Economic Modelling, Elsevier, vol. 83(C), pages 210-220.
    18. Mark A Zezza, 2019. "Convergence in health care spending across counties in New York from 2007 through 2016," PLOS ONE, Public Library of Science, vol. 14(4), pages 1-16, April.
    19. Mulatu F. Zerihun & Juncal Cunado & Rangan Gupta, 2017. "Are Health Care Expenditures and Personal Disposable Income Characterised by Asymmetric Behaviour? Evidence from US State-Level Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 131(2), pages 527-542, March.
    20. Chi Lau & Ka Fung & Lee Pugalis, 2014. "Is health care expenditure across Europe converging? Findings from the application of a nonlinear panel unit root test," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 4(2), pages 137-156, December.

    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. Andrew J. Rettenmaier & Zijun Wang, 2012. "Regional variations in medical spending and utilization: a longitudinal analysis of US Medicare population," Health Economics, John Wiley & Sons, Ltd., vol. 21(2), pages 67-82, February.
    2. Son Hong Nghiem & Luke Brian Connelly, 2017. "Convergence and determinants of health expenditures in OECD countries," Health Economics Review, Springer, vol. 7(1), pages 1-11, December.
    3. 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.
    4. Clemente, Jesús & Lázaro-Alquézar, Angelina & Montañés, Antonio, 2019. "US state health expenditure convergence: A revisited analysis," Economic Modelling, Elsevier, vol. 83(C), pages 210-220.
    5. Joan Costa‐Font & Jordi Pons‐Novell, 2007. "Public health expenditure and spatial interactions in a decentralized national health system," Health Economics, John Wiley & Sons, Ltd., vol. 16(3), pages 291-306, March.
    6. Andrea Leiter & Engelbert Theurl, 2012. "The convergence of health care financing structures: empirical evidence from OECD-countries," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(1), pages 7-18, February.
    7. Paresh Kumar Narayan, 2007. "Do health expenditures 'catch-up'? Evidence from OECD countries," Health Economics, John Wiley & Sons, Ltd., vol. 16(10), pages 993-1008.
    8. Ekaterini Panopoulou & Theologos Pantelidis, 2013. "Cross‐State Disparities In Us Health Care Expenditures," Health Economics, John Wiley & Sons, Ltd., vol. 22(4), pages 451-465, April.
    9. Nicholas Apergis & Tsangyao Chang & Christina Christou & Rangan Gupta, 2017. "Convergence of Health Care Expenditures Across the US States: A Reconsideration," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 133(1), pages 303-316, August.
    10. Massimiliano Affinito, 2011. "Convergence clubs, the euro-area rank and the relationship between banking and real convergence," Temi di discussione (Economic working papers) 809, Bank of Italy, Economic Research and International Relations Area.
    11. Fabio Pammolli & Francesco Porcelli & Francesco Vidoli & Monica Auteri & Guido Borà, 2017. "La spesa sanitaria delle Regioni in Italia - Saniregio2017," Working Papers CERM 01-2017, Competitività, Regole, Mercati (CERM).
    12. Tomasz Rokicki & Aleksandra Perkowska & Marcin Ratajczak, 2020. "Differentiation in Healthcare Financing in EU Countries," Sustainability, MDPI, vol. 13(1), pages 1-17, December.
    13. Isabel Casas & Jiti Gao & Bin Peng & Shangyu Xie, 2021. "Time‐varying income elasticities of healthcare expenditure for the OECD and Eurozone," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 36(3), pages 328-345, April.
    14. Baltagi, Badi H. & Moscone, Francesco, 2010. "Health care expenditure and income in the OECD reconsidered: Evidence from panel data," Economic Modelling, Elsevier, vol. 27(4), pages 804-811, July.
    15. Jochen Hartwig & Jan-Egbert Sturm, 2018. "Testing the Grossman model of medical spending determinants with macroeconomic panel data," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(8), pages 1067-1086, November.
    16. Paul Johnson & Chris Papageorgiou, 2020. "What Remains of Cross-Country Convergence?," Journal of Economic Literature, American Economic Association, vol. 58(1), pages 129-175, March.
    17. Manfred M. Fischer & James P. LeSage, 2015. "A Bayesian space-time approach to identifying and interpreting regional convergence clubs in Europe," Papers in Regional Science, Wiley Blackwell, vol. 94(4), pages 677-702, November.
    18. John Nixon, 2000. "Convergence of health care spending and health outcomes in the EUropean Union, 1960-95," Working Papers 183chedp, Centre for Health Economics, University of York.
    19. Esfandiar Maasoumi & Le Wang, 2008. "Economic Reform, Growth and Convergence in China," Econometrics Journal, Royal Economic Society, vol. 11(1), pages 128-154, March.
    20. Fabio Pammolli & Massimo Riccaboni & Laura Magazzini, 2012. "The sustainability of European health care systems: beyond income and aging," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(5), pages 623-634, October.

    More about this item

    Statistics

    Access and download statistics

    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:wly:hlthec:v:18:y:2009:i:1:p:55-70. 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: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/5749 .

    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.