Growth and Containment of Health Care Expenditure in Industrial Countries
Health Expenditure has been rising faster than the growth of income in most industrial countries. The objective of this paper is to discover what factors determined Health Expenditure per head of population in the G7 Countries and whether governments could control them. The analysis has identified three factors that affect Health Expenditure positively: income per head, the ageing population and the share of public expenditure on GDP. None of these variables can be controlled by the government for the sole purpose of containing the growth of Health Care Expenditure. Therefore, only reform of national Health Service Systems could effectively contain the growth of Health Spending. The reforms introduced by some countries in the early 1990s had no significant effect on cost containment with the result that health care expenditure continued to rise in some faster than before. The exception is Japan which managed to achieve a significant downturn in the growth of health expenditure.
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