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The determinants of health care expenditure: a macroeconomic approach

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  • R. MAHIEU

    (Insee)

Abstract

This paper first presents a time-series analysis of factors influencing aggregate health care expenditure in some OECD countries. We focus on supply-side factors (especially the diffusion of medical technologies) and first estimate a single model on six countries. The results suggest that financial incentives may explain a part of the discrepancies observed between these countries. We then test this hypothesis on panel data for 20 OECD countries, following Gerdtham (1992, 1995), and thus introduce a linear trend for each type of health care system : integrated (like the British NHS), based on Fee-For-Service reimbursement (like France), or based on contracts between providers and insurers (like Germany). We compute an income elasticity around 0.7 (this is Gerdtham's estimation when introducing institutional specificities), and find that the growth of health care expenditure per capita is 0.6 point higher in countries with Fee-For-Service reimbursement than in other countries.

Suggested Citation

  • R. Mahieu, 2000. "The determinants of health care expenditure: a macroeconomic approach," Documents de Travail de l'Insee - INSEE Working Papers g2000-01, Institut National de la Statistique et des Etudes Economiques.
    • Handle: RePEc:nse:doctra:g2000-01
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    File URL: https://www.bnsp.insee.fr/ark:/12148/bc6p06zqr34/f1.pdf
    File Function: Document de travail de la DESE numéro G2000-01
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    More about this item

    Keywords

    health care expenditure; health care system; financial incentives; time series;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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