Abstract

The Greek healthcare system faces public funding gap, as a result of the current financial crisis and relevant austerity measures being forced. Official data have shown that GDP of Greece has been contracted by 25%2 within the last decade, and this has had an impact on the health expenditure of Greek households (of high OPP), as well. Households have been asked to close this gap, since health takes top priority for them. Based on a review of the literature, it was clear that most OECD countries followed, more or less, the same route: increase in spending during pro crisis period and declining afterwards. Thesis hypothesis is that during the recession and austerity measures in Greece, health expenditures of Greek households (HHE), as a proportion of total private expenditure, were increased. This study aims to investigate the relationship between public and private (household) health expenditure (macroeconomic and microeconomic approach) over time and within recession and austerity period in Greece. Through the interpretation of Greeks’ behavior on health services consumption over time, the objective of this study is to highlight the differentiation of Greece’s development model. In this context, by using econometric tools such as multiple regression and co-integration analysis on the raw micro-data of Household Budget Surveys of 1987/88 till 2018, as well as using data of public expenditure of OECD- Health Statistics 2019, in the STATA vs 13, the above mentioned statement is defended. Analysis demonstrated that the Greek HHE was rapidly increasing during 1988-2008, when it started decreasing. The results indicate that the total Private and the total Public Health expenditure seems to have a bidirectional long run relationship and significant co-integration. So does also the public expenditure with the household medical services expenditure and pharmaceuticals. Furthermore, the results indicate that over the years of recession, the monthly household health expenditure decreases, due to confiscation of middle class income which led to consumerism restrictions. However, as households are now spending a bigger portion of their shrunken income for health (as health is an inelastic commodity), HHE, as a proportion of total private expenditure, has eventually risen. Based on a short review (through health data) and comparison among Spain, Portugal, Italy and Ireland, countries that faced considerable economic instability or had memorandums implemented, we conclude that Greece had had a different starting point and diverging paths to exit the Memorandum. The way of national integration and state’s operation with strong social matters (civil war, immigration, dictatorship) resulted in a belated and poorly (sprawled) structured welfare state establishment with considerable weaknesses and difficulties. On that basis, Health Expenditure will sparingly begin to rise, in the foreseeable future, it is recommended that Health Policy planning should consider the severe impact of population ageing, with simultaneous smaller share of active population, which means significant revenue shortfalls and healthcare funding difficulties. Further research and comparative analysis is needed, to indentify the impact of Greece’s financial crisis on HHE, whereas the effect of economic crisis appears clearer over the longer periods of time.

Full Text
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