Capita Health Care Expenditure Research Articles

International comparisons of health care expenditure — conversion factor instability, heteroscedasticity, outliers and robust estimators

In his comment on our [Gerdtham and Jiinsson (1991)] results concerning conversion factor instability in regressions of per capita health care expenditure on per capita GDP based on cross-sectionals of 22 OECD countries,’ Murthy (1992) makes two points. First, he questions the assumption of residual homoscedasticity across countries that we, and Parkin et al. (1987), made in regressions (1)+3). Second, he questions the appropriateness of the Least Square estimator (LS) that we (and Parkin et al.) used to estimate the regression coefficients of the simple two-variable model. Murthy argues that the sample of countries is such that one could expect problems with both residual heteroscedasticity and outliers. Consequently, he uses White’s heteroscedastic consistent covariance matrix estimator to re-estimate the standard errors of the regression coefficients using our data [White (1980)]. Murthy has also calculated various measures to check for the presence of outliers (pp. 3-4). This exercise led to the detection of three observations which might influence the regression coefftcients. Since LS is based on squared deviations from the regression line c (yi-a-pxi)‘, there will be a

Determinants of health care expenditure in Africa: A cross-sectional study

The paper presents some quantitative evidence on the relationship between certain socioeconomic and demographic factors and per capita health care expenditure in Africa. First, GNP per capita, percentage of births attended by health staff and foreign aid received per capita together explained 78.3% of the variance in health care expenditure. Second, per capita GNP is the most significant factor explaining differences in health care expenditure. Contrary to what has been found in comparisons of health care expenditure in the organization for Economic Cooperation and Development (OECD) countries, we found that the income elasticity is close to unity. Furthermore, aid was consistently significant and positive in the three models estimated. Third, variables such as crude birth rate and the population under 15 years of age as percentage of total population were not significant.

Conversion factor instability in international comparisons of health care expenditure

Parkin, McGuire and Yule (1987) (hereafter PMY) report that a regression of per capita health care expenditure on per capita income using different conversion factors (exchange rates, GDP PPPs, health PPPs) gave rise to different results. In this note we apply updated data to the same empirical relationship. In contrast to PMY, we find no noticeable conversion factor instability in that relationship either with respect to the health care income elasticity or with the magnitude of multiple correlation coefficient.

Endogenous hospital regulation and its effects on hospital and non-hospital expenditures

Past studies of hospital rate setting regulation conclude that mature programs have been effective in constraining hospital expenditures. However, if rate regulation is influenced by higher hospital expenditures the relationship between expenditures and rate setting is confounded. This study assesses the impact of rate setting on hospital and non-hospital expenditures using a simultaneous-equation model which separates the effects of hospital expenditures on the decision to regulate from the effects of regulation on expenditures. The simultaneous-equation results indicate that mature rate setting is associated with lower per capita health care expenditures, including hospital and non-hospital expenditures.

Health care expenditure patterns for adolescents

Health care expenditure patterns are described using a sample of 2,767 adolescents aged 10 to 18 years from the National Medical Care Utilization and Expenditure Survey. Average total per capita health care expenditures were $525. Average out-of-pocket expenses were $151 in 1988 dollars. The burden of out-of-pocket expenses was distributed unevenly among the families of adolescents. The 10% of adolescents with the highest expenses accounted for 65% of ail out-of-pocket expenses. The presence of health insurance coverage greatly reduced the risk of incurring burdensome out-of-pocket expenses. Health policy interventions to improve health insurance coverage of adolescents are discussed.

Infant mortality in Hong Kong

Official estimates of infant mortality in Hong Kong show a remarkable decrease over the last 30 years. Between 1950 and 1980 infant mortality rates fell from 99·6 to 11·8/1000 live births - transition from a typical “Third World” rate to one better than that for many European countries, including the U.K. 1,2 (It should be noted that the figures exclude Hong Kong's illegal immigrant population, who are unable to use any Government service and for whom no figures are available.) The improvement seen amongst the legal population may partly be explained by the increasing wealth and westernization of the Colony, and the concomitant lowering of the birth rate to near-Western levels (Table 1). The average wage in Hong Kong, however, at about £25 per week, is well below European levels, while per capita health care expenditure and the quality of housing is low by Western standards. This study bears out the accuracy of the figures and their true representation of infant mortality in the general population.

"Though Much Is Taken": Reflections on Aging, Health, and Medical Care

The Medicare trust funds face huge prospective deficits by the end of this decade.This paper discusses trends in six areas that bear on the Medicare problem: the number of the elderly, their health status, use of medical care, labor force participation, income, and living arrangements. Among the most important findings are: 1) a very large increase since 1965 in life expectancy at age 65; 2) a very large increase since 1976 in real per capita health care expenditures on the elderly relative to expenditures on persons under age 65; 3) a cross-sectional increase with age in per capita health care expenditures that is primarily attributable to very large expenditures in the last year of life; 4) a sharp decrease in labor force participation and a sharp increase in relative income of the elderly since 1965.The paper concludes by raising questions about the need to reconsider the definition of the elderly, the need for more flexible labor market arrangements for older workers, and a need for a social consensus concerning appropriate care of dying patients.