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Austerity Reduces Public Health Investment

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  • Olivier Jacques
  • Alain Noel

Abstract

Public health investments help to prevent mortality and reduce health care costs. Yet very few studies have examined the determinants of preventive care investments across countries and over time. We develop a theory of health spending priorities contrasting preventive and curative care. Preventive care is unlikely to be prioritized by governments since it is a public good that requires the allocation of scarce resources in the present to generate diffuse benefits that unfold only in the long-term. As such, public health is a “quiet” policy that is not supported strongly by interest groups or public opinion. These characteristics have two implications: like other long-term investments, public health programs are particularly vulnerable to fiscal austerity, and prevention expenditures are not influenced by government partisanship since parties cannot attract votes with such low visibility, long term investments. We use a dataset covering 25 OECD countries from 1970 to 2018 to demonstrate that fiscal consolidations are negatively associated with the absolute level of preventive care and with its proportion relative to curative care. We also confirm that left governments are not more likely to invest in public health than right-wing governments. Finally, contributing to the literature on comparative health care analysis, we show that National Health Services systems maintain higher preventive care investments than Social Health Insurance systems. Les investissements en santé publique contribuent à prévenir la mortalité et à réduire les coûts des soins de santé. Pourtant, très peu d'études ont examiné les déterminants des investissements dans les soins préventifs entre les pays et à travers le temps. Nous développons une théorie des priorités en matière de dépenses de santé qui oppose les soins préventifs aux soins curatifs. Il est peu probable que les gouvernements accordent la priorité aux soins préventifs, car il s'agit d'un bien public qui nécessite l'allocation de ressources rares dans le présent pour générer des avantages diffus qui ne se déploient qu'à long terme. En tant que telle, la santé publique est une politique "discrète" qui n'est pas fortement soutenue par les groupes d'intérêt ou l'opinion publique. Ces caractéristiques ont deux implications : comme d'autres investissements à long terme, les programmes de santé publique sont particulièrement vulnérables à l'austérité budgétaire, et les dépenses de prévention ne sont pas influencées par l’idéologie du parti au pouvoir puisque les partis ne peuvent pas attirer les votes avec des investissements à long terme aussi peu visibles. Nous utilisons un ensemble de données couvrant 25 pays de l'OCDE de 1970 à 2018 pour démontrer que les consolidations budgétaires sont négativement associées au niveau absolu de dépenses en soins préventifs et à leur proportion par rapport aux soins curatifs. Nous confirmons également que les gouvernements de gauche ne sont pas plus susceptibles d'investir en santé publique que les gouvernements de droite. Enfin, nous contribuons à la littérature sur l'analyse comparative des soins de santé en démontrant que les systèmes de services nationaux de santé maintiennent des investissements en soins préventifs plus élevés que les systèmes d'assurance sociale.

Suggested Citation

  • Olivier Jacques & Alain Noel, 2022. "Austerity Reduces Public Health Investment," CIRANO Working Papers 2022s-02, CIRANO.
  • Handle: RePEc:cir:cirwor:2022s-02
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    More about this item

    Keywords

    preventive care; austerity; curative care; partisanship; long-term investment; soins préventifs; austérité; soins curatifs; partisanerie; investissement à long terme;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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