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Assessing the impact of health care expenditures on mortality using cross-country data

Author

Listed:
  • Ryota Nakamura

    (Centre for Health Economics, University of York, UK.)

  • James Lomas

    (Centre for Health Economics, University of York, UK.)

  • Karl Claxton

    (Centre for Health Economics, University of York, UK.)

  • Farasat Bokhari

    (University of East Anglia, Norwich, UK.)

  • Rodrigo Moreno Serra

    (University of Sheffield, Sheffield, UK.)

  • Marc Suhrcke

    (Centre for Health Economics, University of York, UK.)

Abstract

A significant body of literature has examined the impact of public health expenditure on mortality, using a global cross-section or panel of country-level data. However, while a number of studies do confirm such a relationship, the magnitude of the impact varies considerably between studies, and several studies show statistically insignificant effects. In this paper we re-examine the literature that identifies this effect using cross-country data. Our analysis builds on the two instrumental variables (IV) approaches embodied by key publications in the field – Bokhari et al. (2007) and Moreno-Serra and Smith (2015). Using exactly the same data and econometric specifications as the published studies, we start by successfully replicating their findings. However, further analyses using updated data and ‘streamlined’ econometric specifications, plus statistical data imputation and extensive robustness checks, reveal highly sensitive results. In particular, the relevance of the IVs is seriously compromised in the updated data, leading to imprecise estimations of the relationship. While our results should not be taken to imply that there is no true mortality-reducing impact of public health care expenditures on mortality, the findings do call for further methodological work, for instance in terms of identifying more suitable IVs or by applying other estimation strategies, in an effort to derive more robust estimates of the marginal productivity of public health care funding.

Suggested Citation

  • Ryota Nakamura & James Lomas & Karl Claxton & Farasat Bokhari & Rodrigo Moreno Serra & Marc Suhrcke, 2016. "Assessing the impact of health care expenditures on mortality using cross-country data," Working Papers 128cherp, Centre for Health Economics, University of York.
  • Handle: RePEc:chy:respap:128cherp
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    References listed on IDEAS

    as
    1. Marwa Farag & A. Nandakumar & Stanley Wallack & Dominic Hodgkin & Gary Gaumer & Can Erbil, 2013. "Health expenditures, health outcomes and the role of good governance," International Journal of Health Economics and Management, Springer, vol. 13(1), pages 33-52, March.
    2. Afridi, Muhammad Asim & Ventelou, Bruno, 2013. "Impact of health aid in developing countries: The public vs. the private channels," Economic Modelling, Elsevier, vol. 31(C), pages 759-765.
    3. Paul Revill & Simon Walker & Jason Madan & Andrea Ciaranello & Takondwa Mwase & Diana M Gibb & Karl Claxton & Mark J Sculpher, 2014. "Using cost-effectiveness thresholds to determine value for money in low- and middle-income country healthcare systems: Are current international norms fit for purpose?," Working Papers 098cherp, Centre for Health Economics, University of York.
    4. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588.
    5. Jessica Ochalek & James Lomas & Karl Claxton, 2015. "Cost per DALY averted thresholds for low- and middle-income countries: evidence from cross country data," Working Papers 122cherp, Centre for Health Economics, University of York.
    6. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    7. Rodrigo Moreno-Serra & Peter C. Smith, 2015. "Broader health coverage is good for the nation's health: evidence from country level panel data," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 178(1), pages 101-124, January.
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    Cited by:

    1. Emanuele Arcà & Francesco Principe & Eddy Van Doorslaer, 2020. "Death by austerity? The impact of cost containment on avoidable mortality in Italy," Health Economics, John Wiley & Sons, Ltd., vol. 29(12), pages 1500-1516, December.
    2. Jessica Ochalek & Haiyin Wang & Yuanyuan Gu & James Lomas & Henry Cutler & Chunlin Jin, 2020. "Informing a Cost-Effectiveness Threshold for Health Technology Assessment in China: A Marginal Productivity Approach," PharmacoEconomics, Springer, vol. 38(12), pages 1319-1331, December.

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    JEL classification:

    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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