US Health Care Expenditures, GDP and Health Policy Reforms: Evidence from End-of-Sample Structural Break Tests.

Abstract

This research investigates the over-time stability of the aggregate US healthcare expenditure (HCE)–GDP relationship, focusing on periods of healthcare reforms. The most consequential reforms—Medicaid/Medicare and the Affordable Care Act (ACA)—are challenging to study because they occur near the ends of the available data. Using annual national- and state-level data and a battery of structural break tests, we find the HCE–GDP relationship to be overwhelmingly stable. An ancillary analysis around the 2006 Massachusetts healthcare reform, which avoids the confounding effects of the Great Recession and the staggered rollout of the ACA, likewise finds no change.