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PubMed2000

Managed care, deficit financing, and aggregate health care expenditure in the United States: a cointegration analysis.

We applied a battery of cointegration tests comprising those of Johansen and Juselius [19], Phillips and Hansen [35], and Engle and Granger [6], to model aggregate health care expenditure using 1960-96 US data. The existence of a stable long-run economic relationship or cointegration is confirmed, in the United States, between aggregate health care expenditure and real GDP, population age distribution, managed care enrollment, number of practicing physicians, and government deficits. The evidence of cointegration among these variables, chosen on the theoretical basis of prior studies, implies that while they are individually non-stationary in levels, together they are highly correlated and move, in the long run to form an economic equilibrium relationship of US aggregate health care expenditure. More specifically, and for the first time in this line of inquiry, (i) managed care enrollment is found to be negatively associated with the level of health care spending, (ii) supply disinduced demand effects of physicians tend to moderate health expenditure, and (iii) government deficit financing is positively related to health care spending. The observed sign and magnitude of the income coefficient are consistent with health care being a luxury good.

Age Distribution↗
PubMed1999

National Health Accounts development: lessons from Thailand.

National Health Accounts (NHA) are an important tool to demonstrate how a country's health resources are spent, on what services, and who pays for them. NHA are used by policy-makers for monitoring health expenditure patterns; policy instruments to re-orientate the pattern can then be further introduced. The National Economic and Social Development Board (NESDB) of Thailand produces aggregate health expenditure data but its estimation methods have several limitations. This has led to the research and development of an NHA prototype in 1994, through an agreed definition of health expenditure and methodology, in consultation with peer and other stakeholders. This is an initiative by local researchers without external support, with an emphasis on putting the system into place. It involves two steps: firstly, the flow of funds from ultimate sources of finance to financing agencies; and secondly, the use of funds by financing agencies. Five ultimate sources and 12 financing agencies (seven public and five private) were identified. Use of consumption expenditures was listed under four main categories and 32 sub-categories. Using 1994 figures, we estimated a total health expenditure of 128,305.11 million Baht; 84.07% consumption and 15.93% capital formation. Of total consumption expenditure, 36.14% was spent on purchasing care from public providers, with 32.35% on private providers, 5.93% on administration and 9.65% on all other public health programmes. Public sources of finance were responsible for 48.79% and private 51.21% of the total 1994 health expenditure. Total health expenditure accounted for 3.56% of GDP (consumption expenditure at 3.00% of GDP and capital formation at 0.57% of GDP). The NESDB consumption expenditure estimate in 1994 was 180,516 million Baht or 5.01% of GDP, of which private sources were dominant (82.17%) and public sources played a minor role (17.83%). The discrepancy of consumption expenditure between the two estimates is 2.01% of GDP. There is also a large difference in the public and private proportion of consumption expenses, at 46:54 in NHA and 18:82 in NESDB. Future NHA sustainable development is proposed. Firstly, we need more accurate aggregate and disaggregated data, especially from households, who take the lion's share of total expenditure, based on amended questionnaires in the National Statistical Office Household Socio-Economic Survey. Secondly, partnership building with NESDB and other financing agencies is needed in the further development of the financial information system to suit the biennial NHA report. Thirdly, expenditures need breaking down into ambulatory and inpatient care for monitoring and the proper introduction of policy instruments. We also suggest that in a pluralistic health care system, the breakdown of spending on public and private providers is important. Finally, a sustainable NHA development and utilization of NHA for planning and policy development is the prime objective. International comparisons through collaborative efforts in standardizing definition and methodology will be a useful by-product when developing countries are able to sustain their NHA reports.

Data Collection↗
PubMed2006

Federalism and regional health care expenditures: an empirical analysis for the Swiss cantons.

Switzerland (7.2 million inhabitants) is a federal state composed of 26 cantons. The autonomy of cantons and a particular health insurance system create strong heterogeneity in terms of regulation and organisation of health care services. In this study we use a single-equation approach to model the per capita cantonal expenditures on health care services and postulate that per capita health expenditures depend on some economic, demographic and structural factors. The empirical analysis demonstrates that a larger share of old people tends to increase health costs and that physicians paid on a fee-for-service basis swell expenditures, thus highlighting a possible phenomenon of supply-induced demand.

Delivery of Health Care↗
PubMedDate not supplied

A community health report card: comprehensive assessment for tracking community health (CATCH).

A systematic method for assessing the health status of communities has been under development at the University of South Florida since 1991. The system, known as CATCH, draws 226 indicators from multiple sources and uses an innovative comparative framework and weighted evaluation criteria to produce a rank-ordered community problem list. The CATCH results from II Floridian counties have focused attention on high priority health problems and provided a framework for measuring the impact of health expenditures on community health status outcomes. The method and plans to create an automated data warehouse to support its expansion and enrichment are described.

Community Health Planning↗
PubMed2001

Reply to: Econometric issues in testing the age neutrality of health care expenditure.

Salas and Raftery allege that in our paper, (1) remaining life expectancy is an endogenous explanatory variable of health care expenditure and (2) the parameter designed to correct for sample selection bias in fact represents a hidden relationship between health care expenditure and age. We argue that claim (1) is not supported by the available empirical evidence, while claim (2) seems to derive from a too cursory reading of our paper.

Age Factors↗
PubMed2006

Health care costs in the last year of life--the Dutch experience.

Health expenditure depends heavily on age. Common wisdom is that the age pattern is dominated by costs in the last year of life. Knowledge about these costs is important for the debate on the future development of health expenditure. According to the 'red herring' argument traditional projection methods overestimate the influence of ageing because improvements in life expectancy will postpone rather than raise health expenditure. This paper has four objectives: (1) to estimate health care costs in the last year of life in the Netherlands; (2) to describe age patterns and differences between causes of death for men and women; (3) to compare cost profiles of decedents and survivors; and (4) to use these figures in projections of future health expenditure. We used health insurance data of 2.1 million persons (13% of the Dutch population), linked at the individual level with data on the use of home care and nursing homes and causes of death in 1999. On average, health care costs amounted to 1100 Euro per person. Costs per decedent were 13.5 times higher and approximated 14,906 Euro in the last year of life. Most costs related to hospital care (54%) and nursing home care (19%). Among the major causes of death, costs were highest for cancer (19,000 Euro) and lowest for myocardial infarctions (8068 Euro). Between the other causes of death, however, cost differences were rather limited. On average costs for the younger decedents were higher than for people who died at higher ages. Ten per cent of total health expenditure was associated with the health care use of people in their last year of life. Increasing longevity will result in higher costs because people live longer. The decline of costs in the last year of life with increasing age will have a moderate lowering effect. Our projection demonstrated a 10% decline in the growth rate of future health expenditure compared to conventional projection methods.

Age Factors↗
PubMed1997

The effect of HMOs on fee-for-service health care expenditures: evidence from Medicare.

This paper examines the relationship between HMO market share and fee-for-service health care expenditures using 1986-1990 county- and metropolitan statistical area-level data on Medicare expenditures and HMO market share. Fixed-effects estimates imply that fee-for-service expenditures are concave and decreasing in market share. Increases in market share from 20% to 30% are associated with 3-7% expenditure reductions. Instrumental variable estimates that exploit cross-sectional variation in HMO activity also indicate a concave relationship, with expenditures declining in market share for market shares above 15-18%, but imply larger expenditure responses to market share changes.

Catchment Area, Health↗
PubMed1999

Ageing of population and health care expenditure: a red herring?

This paper studies the relationship between health care expenditure (HCE) and age, using longitudinal rather than cross-sectional data. The econometric analysis of HCE in the last eight quarters of life of individuals who died during the period 1983-1992 indicates that HCE depends on remaining lifetime but not on calendar age, at least beyond 65+. The positive relationship between age and HCE observed in cross-sectional data may be caused by the simple fact that at age 80, for example, there are many more individuals living in their last 2 years than at age 65. The limited impact of age on HCE suggests that population ageing may contribute much less to future growth of the health care sector than claimed by most observers.

Aged↗
PubMed2004

On the international stability of health care expenditure functions: are government and private functions similar?

This paper studies the stability of health care expenditure functions in a sample of OECD countries. We adopt the cointegration approach and the results show that there is a long-term relationship between total health care expenditure (HCE) and gross domestic product (GDP). However, the existence of cointegration is only shown when we admit the presence of some changes in the elasticities of the model. Our results also provide evidence against the existence of a unique relationship between health and GDP for the sample. Thus, we can conclude that the differences in health systems may cause differences in the aggregate functions. Additionally, we examine aggregate health functions for government (GHCE) and private expenditures (PHCE), again finding evidence of different patterns of behaviour. Finally, we open a discussion on the character of health as a necessary or luxury good. In this context, we find differences between the government and the private function. In order to illustrate these findings, we propose a theoretical model as an example of the influence of political decisions on income elasticity.

Global Health↗
PubMed2003

Longevity and health care expenditures: the real reasons older people spend more.

OBJECTIVES: In this study, we investigated the relative contributions of both age and time to death to health care expenditures for elderly Medicare beneficiaries. We also analyzed differences in expenditure patterns by age and time to death for various service types and payers. METHODS: We conducted graphical analysis of person-month level data on 25,994 elderly persons from the 1992-1998 Medicare Current Beneficiary Survey Cost and Use files. RESULTS: Monthly health care expenditures for elderly people increase substantially with age primarily because mortality rates increase with age and health care expenditures increase with closeness to death. Time to death is the main reason for higher inpatient care expenditures, whereas aging is the main reason for higher long-term care expenditure. DISCUSSION: Both increases in the absolute number of elderly persons and in their longevity will increase future Medicare expenditures. Yet, the expected increase in per person health care expenditures caused by greater longevity of Medicare beneficiaries will be less than expected because of the concentration of expenditures at the end of life rather than during extra years of a relatively healthy life. The latter conclusion may be altered, however, because of other underlying considerations, such as technological change.

Age Factors↗
PubMed1998

Health care expenditures and GDP: panel data unit root test results.

This short paper presents unit root test results for time series on per capita national health care expenditures and gross domestic product in the OECD. Unlike the country-by-country test used by [Hansen, P., King, A., 1996. The determinants of health care expenditure: A cointegration approach. J. Health Econ, 15, 127-137], the test we employ exploits the panel nature of the OECD data. Using this approach, we are able to reject the null hypothesis that these series contain unit roots. No single test is likely to be definitive in this rapidly-evolving area of econometric research; however, our results help to mitigate concern that panel data analyses of national health care expenditures are misspecified.

Data Collection↗
PubMedDate not supplied

Expenditures on health care in the last year of life.

18-26% of public expenditure on health care is devoted to care of patients in their last year of life. 60% of this expenditure is on patients in somatic nursing homes. The figures do not tell directly whether too much or too little money in Norwegian health care is spent on people in the end stage of life. In order to answer this question, one must look at the quality of terminal care and assess the share of patients having a reasonable benefit of the care they receive.

Health Expenditures↗
PubMed1989

What do international comparisons of health care expenditures really show?

There is much interest in international comparisons of health care expenditures, in particular their relation to national income. They have been widely used to judge countries' performance in cost-containment, and in the United Kingdom have been widely quoted in debates about the funding of the National Health Service. This paper challenges conclusions drawn from simple analyses of this topic, which have used dubious and inappropriate data, questionable methods and assumptions, and simplistic ad-hoc reasoning. It looks particularly at price differences between countries, which have usually been hidden by using exchange rates to standardize national figures. When more appropriate conversion factors called purchasing power parities are used, many of the simple and conventionally-accepted conclusions no longer appear so obvious. The attempt to create apparent scientific facts for policy debates has been based on a misuse of international comparisons.

Cross-Cultural Comparison↗