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Health expenditure growth: reassessing the threat of ageing.

In this paper we evaluate the respective effects of demographic change, changes in morbidity and changes in practices on growth in health care expenditures. We use microdata, i.e. representative samples of 3441 and 5003 French individuals observed in 1992 and 2000. Our data provide detailed information about morbidity and allow us to observe three components of expenditures: ambulatory care, pharmaceutical and hospital expenditures. We propose an original microsimulation method to identify the components of the drift observed between 1992 and 2000 in the health expenditure age profile. On the one hand, we find empirical evidence of health improvement at a given age: changes in morbidity induce a downward drift of the profile. On the other hand, the drift due to changes in practices is upward and sizeable. Detailed analysis attributes most of this drift to technological innovation. After applying our results at the macroeconomic level, we find that the rise in health care expenditures due to ageing is relatively small. The impact of changes in practices is 3.8 times larger. Furthermore, changes in morbidity induce savings which more than offset the increase in spending due to population ageing.

Adolescent↗

Pooling international health care expenditure data.

The purpose of this paper is twofold. The first is to analyse the statistical relationship between real health care expenditure per capita and aggregate income, public share in finance, age-dependency ratio and inflation. The second purpose deals with methodological problems involved in pooling health care expenditure data. The empirical work is based on pooled cross-sectional, time-series data for 22 OECD countries from 1972 to 1987. Public finance share and inflation were found to be associated with lower per capita health care expenditure. No consistent correlation was found between the age-dependency ratio and health care expenditure. Contrary to results of earlier studies, we found that health care expenditure does not appear to be income (GDP) elastic. However, the results do not appear to be robust to changes in the time periods and countries included.

Age Factors↗

Econometric analyses of national health expenditures: can positive economics help to answer normative questions?

The size of national health care expenditure is an important research and policy issue. This paper reviews theoretical and empirical analyses of an implied optimal size for a health sector. Various economic theories are explicitly or implicitly invoked, but none is fully satisfactory. Theory provides, at best, a loose justification for empirical specifications of health sector behaviour. Nevertheless, this has a large and growing empirical research industry. The complexity of the issues provides an excuse for reliance on empirical analyses using ad hoc models. The paper analyses aggregate time-series data, using the cointegration approach, on health, health care expenditures and national income. Only one national model met both statistical criteria and showed a significant relationship: between potential life years lost and health care expenditure in the UK. The case for any general relationships remains unproven. There is no objective scientific method to determine optimal health expenditure, nor should we expect one. However, positive analyses can help with normative questions. A better understanding of health expenditure determination would arise from better specification of the relationships, perhaps by analysis at a lower level of aggregation.

Bias↗

Estimation of the determinants of household health care expenditures in Nepal with controls for endogenous illness and provider choice.

This paper uses the Nepal Living Standards Survey, a nationally representative sample of households from 1996, to investigate the determinants of household out-of-pocket health expenditures. The analysis uses a multi-equation joint estimation to control for endogeneity of sickness and provider choice. The results of this analysis indicate several interesting findings. First, common unobserved factors were found to be statistically significant determinants of illness, choice of provider, and health expenditures, and may cause bias to parameter estimates if not controlled. Second, the income elasticity is estimated to be 1.10, with income having both a direct effect on health expenditure, and an indirect effect through likelihood of illness and the type of provider that is chosen. Third, housing and sanitary conditions were found to have a substantial effect on illness, and as a result, out-of-pocket health care expenditures. Fourth, despite the fact that urban, ill individuals who seek care are more likely to utilize care in more expensive settings, average health care expenditure among the urban sample was found to be substantially lower than among the rural sample, partly due to a lower likelihood of reporting illnesses and injuries and of using any type of health care provider.

Adolescent↗

Applying DALY to assessing national health insurance performance: the relationship between the national health insurance expenditures and the burden of disease measures in Iran.

The Iranian government has considered using DALYs as an indicator to prioritize health service expenditures to reduce the burden of disease for the public. A cross-sectional study was designed to compare several measures of the burden of disease with the actual amounts of national health insurance (NHI) expenditures, in one province of Iran (Semnan) for a period of 2 months (September 2000 and February 2001). Furthermore, on the basis of the research findings, a questionnaire was designed and distributed to stakeholders at local and national levels to explore their ideas about the gap between the expenditures of the diseases group and their burden. A semi-structured interview was conducted to elicit participants' views on the research findings. The results of this study have revealed that, currently, there is no strong relation between the NHI expenditures and DALY (r = 0.41, p = 0.09), but that there are stronger relationships between the amounts of NHI reimbursements with YLL (r = 0.52, p < 0.05), mortality (r = 0.67, p < 0.01) and hospital days (r = 0.90, p < 0.01). Comparing each group of disorders' DALY with the resources allocated to them (cost per DALY) it was shown that diabetes mellitus, musculoskeletal diseases, maternal conditions, sense organ disorders received considerably generous funding; and, perinatal conditions, congenital abnormalities, nutritional deficiencies were relatively under-funded. The qualitative research results showed that the majority of respondents agreed that the differences presently existing between disorders' burden and NHI expenditures cannot be justified; and, further, that reducing the overall burden of disease must be one of the most important objectives for the NHI.

Attitude to Health↗

The determinants of health expenditure in the OECD countries: a pooled data analysis.

This paper uses international health expenditure and the latest OECD data to investigate the determinants of aggregate health expenditure. The study differs from most previous studies in two principal ways. First, it uses a somewhat larger sample for estimation, with pooled time-series, cross-section data for 22 OECD countries for a 20-year period. Most previous work has used a purely cross-section approach: in this case, the small sample size reduced the statistical reliability of results and limited the number of hypotheses that can be tested simultaneously. Second, and following from this, a more extensive range of hypotheses is tested, with particular emphasis on those relating to the contractual relations between payers, providers and patients. The findings show, for example, that the use of primary care "gatekeepers" seems to result in lower health expenditure and also that the way of remunerating physicians in the ambulatory care sector appears to influence health expenditure; capitation systems tend to lead to lower expenditure than fee-for-service systems.

Cross-Cultural Comparison↗

Tests of stationarity and cointegration of health care expenditure and gross domestic product: an application to Turkey.

This study examines the long-run relationship among the per capita private, public, and total health care expenditure and per capita gross domestic product and population growth of Turkey. We find some evidence of multivariate cointegrating relationships among the health care expenditure and gross domestic product, and population growth. We further find a bivariate cointegrating relationship between private health care expenditure and per capita gross domestic product. Accordingly, a 10% increase in gross domestic product would translate into a 21.9% increase in total health care expenditure while controlling population growth. The income elasticity of health expenditure is found to be greater than 1, implying that health care is a luxury good in Turkey. Finally we note that there exists one-way causality running from per capita gross domestic product to various definitions of health care expenses.

Economics↗

Medicaid expenditures for children with autistic spectrum disorders: 1994 to 1999.

This study used data from 1994 to 1999 from one large county in Pennsylvania to estimate the Medicaid expenditures of children diagnosed with autism spectrum disorders (ASD) and to compare these expenditures with those of other Medicaid-eligible children. On average, children diagnosed with ASD had expenditures 10 times those of other children. Differences in expenditures were driven in large part by inpatient psychiatric care. Further research is required to determine whether hospitalized children could be served in less restrictive and less expensive settings. Lack of differences in ambulatory care expenditures suggests that children with ASD are not receiving additional primary care services that would be indicative of appropriately coordinated services as suggested by the medical home model.

Autistic Disorder↗

Health and education expenditure in the United Kingdom: what priority?

Public expenditure on goods and services per head of population on the National Health Service (NHS) in the United Kingdom has risen less rapidly than some other forms of public expenditure such as education. Revenue expenditure at 1970 market prices on goods and services in the NHS per head of population rose by 38% during the period 1951 to 1968. During the same time interval, expenditure at 1970 market prices on goods and services in education per head of population rose by 84%. Health, as measured by standardised mortality ratios (SMRs), improved over a similar period. This paper argues that, in the long term, the priority given to education expenditure may not necessarily be detrimental to further improvements in community health.

Cost-Benefit Analysis↗

Does smoking increase medical care expenditure?

The impact of smoking on medical care expenditure is analyzed, challenging the widespread belief that smoking imposes a large cost burden on health services systems. The results imply that lifetime expenditure is higher for nonsmokers than for smokers because smokers' higher annual utilization rates are overcompensated for by nonsmokers' higher life expectancy. Population simulation, taking into account the effects of past smoking on present population size and composition, suggests that 1976 expenditure would have been the same if no male born since 1876 had ever smoked. The male population would have been larger, particularly at older ages, increasing medical care expenditure, but this increase would have been offset by lower annual medical care utilization rates. Thus the results imply that smoking does not increase medical care expenditure and, therefore, reducing smoking is unlikely to decrease it.

Adult↗

Mental illness, traumatic brain injury, and medicaid expenditures.

OBJECTIVE: To estimate the rates of mental illness among Medicaid beneficiaries with traumatic brain injury (TBI) and associated Medicaid-paid expenditures. DESIGN: Retrospective claims-based calendar year data. SETTING: Claims data. PARTICIPANTS: Medicaid recipients with diagnosed TBI and mental illness who received Medicaid services in 4 states in 1995. INTERVENTIONS: Not applicable. MAIN OUTCOME MEASURES: Annual expenditures for total, inpatient, and noninpatient services, as derived from Medicaid personal summary files. Mental illness and TBI were identified by using International Classification of Diseases, 9th Revision , Clinical Modification codes recorded in Medicaid claims. RESULTS: Of a total of 493,663 Medicaid recipients, 3641 (0.7%) were diagnosed with TBI in the 4 states. Significant demographic and racial differences were found in the rates of TBI; 18% of patients with TBI were diagnosed with serious mental illness. People with TBI in the age group 40 to 49 years were more likely to have a mental disorder. There were significant differences in estimated total, inpatient, and noninpatient expenditures between those with and without mental illness. In general, those with serious mental illness had higher Medicaid-paid expenditures than those without any mental illness. CONCLUSIONS: Psychiatric comorbidity in TBI increases the overall expenditures in this population. This increased cost is an important consideration in programming for those with TBI.

Adult↗

Impact of hospital and physician characteristics on medical expenditures for acute myocardial infarction hospitalization.

This study aims to examine the impact of length of stay, hospital characteristics, physician characteristics and other factors on the expenditures of hospitalization for acute myocardial infarction (AMI) under Taiwan's National Health Insurance program. This study uses data collected from the Taiwan's National Health Research Institute's 2001-2003 National Health Insurance Research Database. We estimated contributors to increased expenditures of hospitalization using three-stage least square regression model. The hospital expenditures for the treatment of AMI averaged NT$126,366 (US$3829, US$1=NT$33) per discharge, with the largest proportion (27%) spent on room expenditures. They were strongly impacted by length of stay, increasing around 4.8% per day. We conclude that hospital expenditures for the treatment of AMI patients may vary widely depending on the characteristics of the hospital and physicians that provide them care.

Adult↗

The pervasiveness of pharmaceutical expenditure inertia in the OECD countries.

This paper constructs and estimates an economic model for testing statistically the strength of possible 'expenditure inertia' as a plausible reason for rising drug expenditures of the Organization for Economic Cooperation and Development (OECD) countries. The ethical drugs sector in the OECD health care systems is increasingly targeted as the major culprit in the rising cost. Using multiple regression analysis, and the maximum likelihood estimation method, the data of each country (taken from OECD Health Data, 1997) were first tested for functional form optimality with the Box-Cox power family transformations model. Drug expenditure elasticities, at data means, were computed using each country's optimal regression model estimates. The results indicate that the traditionally fitted a priori limited functional form models (e.g., linear, log-log) are not globally consistent with data across countries. The effect of a one-period lagged real per-capita drug expenditure (capturing inertia or habit persistence) on current period real per-capita prescription expenditure is statistically significant in most countries. Pharmaceutical demands are inelastic, and tend to behave like a necessity, as expected. Since the significant effects of economic, demographic, and other drivers of high drug spending differ across countries, country-specific implications and policy suggestions for cost controls ought to differ.

Aged↗

Expenditures associated with preventive healthcare.

BACKGROUND: The Office of Disease Prevention and Health Promotion emphasizes the use of preventive healthcare interventions to "increase quality and years of healthy life". The objective of this study is to evaluate over a 1-year period the total individual healthcare expenditures based upon the likelihood of the person utilizing preventive healthcare measures. METHODS: We analyzed data from the 1998 Medical Expenditure Panel Survey (MEPS) to compare healthcare expenditures of respondents who have and have not followed generally accepted preventive healthcare measures including influenza vaccination, blood pressure checkup, prostate examination, cholesterol determination, and mammography. RESULTS: In general, respondents who lacked evidence of pursuing accepted preventive healthcare practices had lower overall healthcare expenditures in 1998 compared to those who pursued such practices. Specifically, they had lower expenditures for office-based visits and for prescriptions. CONCLUSIONS: People who pursue accepted preventive healthcare measures spent more for their total healthcare over a given year.

Aged↗

Service utilization and expenditures for the treatment of panic disorder.

The outpatient service utilization and estimated expenditures for the treatment of panic disorder for patients prior to their enrollment in a large clinical trial were examined. Data were drawn from the Cross-National Collaborative Panic Study. The sample consists of 391 patients who met DSM-III criteria for panic disorder and were enrolled at one of the US sites of the trial. The rate and frequency of outpatient mental health visits to primary care and specially mental health providers for the current episode of panic disorder are examined. Estimates of direct expenditures for these services are presented (in 1993 US dollars). Over 70% of the patients used primary care for mental health services whereas about 47% of the patients used specialty mental health services. Nearly half of the patients (46.8%) saw a nonpsychiatrist medical specialist, most often a cardiologist (20.6%). Among all patients, those with more frequent panic attacks were more likely to use some form of outpatient mental health services for panic disorder. Among users of any services, those with more severe impairment were more likely to use specialized mental health services. The mean estimated expenditure for the panic episode was $3339, about half of which was accounted for by specialty mental health expenditures. Among users, the median estimated expenditures was $518 for primary care physicians and $2122 for specialty mental health services. In conclusion, the service utilization in this sample of patients with panic disorder is highly varied. Both the primary care and specialty mental health sectors play prominent roles in the community treatment of panic disorder.

Adult↗

The impact of changes in private health expenditure on New Zealand households.

The proportion of New Zealand's total health expenditure financed by the public sector has fallen from 87% in 1983/84 to 77% in 1997/98 in real per capita terms. In the paper, we firstly describe changes in private health expenditure in New Zealand and compare these changes with trends in private and public health expenditure in a number of OECD countries. Secondly, we find that in New Zealand, there have been increases in both out-of-pocket payments and membership of private health insurance funds over the period from 1983/84 to 1997/98. We analyze the relationship between out-of-pocket expenditure, insurance expenditure, and household income across income deciles and across time. We find that out-of-pocket payments are regressive but the regressivity did decline in 1993/94 in response to a government initiative to improve the targeting of government subsidies towards lower income households.

Australia↗

[Factors affecting drug expenditure in the primary care centre in a health area].

OBJECTIVE: To identify the factors affecting drug expenditure.Design. Cross-sectional study.Setting. Madrid Primary Care area. PARTICIPANTS: 21 health centres. MEASUREMENTS: Association of the drug expenditure per inhabitant of each health centre during 1999 with the characteristics of its staff and operation of the centre. MAIN RESULTS: Expenditure on drugs per inhabitant, 14360 plus minus 3040 pesetas (86.31 plus minus 18.27; general practitioners, 19.62 plus minus 23.8%; doctors working as locums, 40.48 plus minus 20.72%; women doctors, 59.76 plus minus 13.36%; family doctors, 38.57 plus minus 21.35%; team nurses, 86.6 plus minus 18.27%; population over 65, 18.03 plus minus 7.73%; patients per day attended by each general practitioner, 32.82 plus minus 3.81; number of sessions per year on prescription profiles, 5 plus minus 3.91; prescription avoidable because of health card: 3106 plus minus 808 pesetas (18.67 plus minus 4.86 ); compliance with service offer, 1.7 plus minus 3.78. Drug expenditure per inhabitant dropped when sessions on prescription profiles (p = 0.013), the percentage of women doctors (p = 0.067) and the percentage of family doctors (p = 0.035) increased; and it dropped too when the over-65 population (p = 0.099) and the amount of prescription avoidable through the card (p = 0.034) dropped. In the multivariate analysis, the sessions on prescription profiles (ss = -843), the percentage of nurses in the reformed model (ss = -155), the percentage of family doctors (ss = -142) and the percentage of doctors from the traditional model (ss = -121) explain 71.2% of the variability in drug expenditure per inhabitant (F = 6.909; p = 0.002). CONCLUSIONS: The sessions to discuss prescription profiles, the presence of nurses from the reform model, postgraduate medical training and the employment of doctors under the traditional model are the factors that our study finds are linked to lower drug expenditure per inhabitant.

Catchment Area, Health↗

[Do generic drugs help control expenditure on hypertension? Apropos of a case].

OBJECTIVE: In this article we analyze the influence of generic drugs on pharmaceutical expenditure on hypertension from the payer's perspective (the public health service), by examining the most widely used drugs: angiotensin converting enzyme inhibitors (ACEi) and angiotensin II receptor blockers (ARBs). METHODS: Based on billing data to the public health service from all the pharmacies in the Health Area of Malaga, we studied the utilization (containers and cost) of ACEi (generic drugs ACEi+G and brand name) and ARBs (brand name only) (subgroup C09 ATC index) from 1999 to 2002. The mean price (weighted according to sales) and the percentage of deviation of prescriptions from one group of drugs to another was also studied. RESULTS: The increase in consumption of packages in subgroup C09 was 20.79%; the increase was greater for ARBs (136%) and for ACEi+G (177%). The total amount spent during the study period increased by more than 42%. Expenditure on ACEis decreased by almost 7%, despite the increase in expenditure on ACEi+G, whereas expenditure on ARBs increased by more than 154%. The mean price of this subgroup, weighted according to sales, increased by nearly 18%. The mean weighted price of the generic drugs, captopril and enalapril, and that of the brand name, trandolapril, decreased. Notable among ARBs was the increase in mean price weighted according to sales of irbesartan (9%) and valsartan (16%). CONCLUSIONS: The use of generic drugs has reduced expenditure on ACEi and the mean weighted price of the subgroup. However, the increased use of generic drugs has not produced the expected savings for the Department of Health. This could be due to deviation of prescription scores toward drugs not affected by substitution by the pharmacy.

Angiotensin II Type 2 Receptor Blockers↗