Health Spending Growth Research Articles

Long-Term Health Expenditure Changes in Selected Balkan Countries.

Spending on health is a significant policy issue for most countries’ economies of the world. Those expenditures put high pressure on public budgets, measuring government investments in health and well-being of their citizens. This task is even more challenging for most Balkan countries, embraced by the global economic crisis in the last decade and prior history of civil war for most of them. Total health expenditure (THE), as a sum of public and private expenditure (1), expressed as percentage of gross domestic product (GDP), in the most of the selected Balkan countries, for the selected period from 1995 to 2012, showed obvious increase (Table 1) among majority of them. THE share of GDP among observed countries in 2012 was highest in Albania, with almost two and the half times larger share than in 1995. Romania, Serbia, and Bulgaria recorded about 1.5 fold higher share, while Greece, Bosnia, and Herzegovina and Montenegro remained at the same level as in 1995, comparing selected indicator. Exceptions were Croatia and The Former Yugoslav Republic of Macedonia (FYRM), with minor decrease. Possible explanations could be decline in the number of births, an increase in the mortality of younger aged people during the war and negative migration trends. Those could have influenced on stagnation of the growth of THE as percentage of GDP in Croatia (2), while FYRM is a country with more than 25% of the population living in poverty and with an unemployment rate in the country of over 30% (3). On the other hand, growth in health spending as a proportion of GDP contribute to the problem of economic and fiscal sustainability where health system revenue is insufficient to meet growing health obligations (4). This scenario is even more obvious in countries with shrinking economies.

The Role of Chronic Disease, Obesity, and Improved Treatment and Detection in Accounting for the Rise in Healthcare Spending Between 1987 and 2011

To curb rising healthcare expenditures in the U.S.A., the factors underlying this growth must be well understood. We aim to explore how chronic disease prevalence, obesity, and improved disease detection and treatment rates contributed to the growth in health spending in the U.S.A. between 1987 and 2011. We use spending decomposition equations to estimate the portion of spending growth attributable to prevalence increases, rising treatment costs, and population growth, respectively. We use two-part models to estimate the portion of prevalence-related spending that is potentially due to obesity. We examine changing diagnosis and treatment rates to assess how much of the growth in spending might be desirable. We find that the share of total healthcare spending associated with the treatment of chronic disease has risen dramatically from 1987-2011. In particular, we estimate that 77.6% of healthcare spending growth is attributable to patients with four or more chronic conditions. We find that rising obesity levels may explain between 11.4 and 23.5% of the increase in healthcare expenditure for several specific chronic conditions. Diagnosis and treatment rates for chronic disease are improving. Individuals with multiple chronic conditions are disproportionately responsible for rising healthcare expenditure. Much of spending growth associated with rising rates of chronic disease can be linked to rising obesity rates. Though much of the growth in spending is generally considered undesirable, disease detection and treatment rates are also rising, suggesting that at least some of the recent growth in healthcare expenditure may be beneficial.

Assessing the Impact of Some Health Care Cost Drivers in Canada During the Last Decade

Public spending on health in Canada has reach $121 billion in 2008; an average annual increase of 7.4% compared to the 1998 level. For the same period, total government revenue has grown at an average annual rate of 5.2%. This fact has led some stakeholders to conclude that health spending is unsustainable. It has also kindled interest of policy makers in understanding current cost drivers of health expenditures in Canada, namely within the context of the imminent end of the 2004 Health Ministers Accord and future discussions regarding renewal of Federal/Provincial/Territorial (F/P/T) funding of health care. The objective of this study is to better understand the impact of some health care cost drivers over the last ten years in Canada. These key questions are addressed: To what extent did aging and other factors such as technology drive health care costs over the last ten years? How did growth in public sector health spending compare to growth in other government programs? Using data from Public Accounts and the National Health Expenditures (NHEX) database, we found that, even in a decade where the health sector has benefited from substantial funding, it did not prevent growth from happening in most of the other sectors, such as transport and education. Aging accounted for less than 1.0% of the growth in public sector health spending. Other factors that impact health spending growth include: fiscal position, health-specific inflation and technological change, with the latter being possibly one of the most important components.

Variations in health care delivery within the European Union

European Union (EU) healthcare systems, whether they are National Health Services or Social Insurance systems, are going through difficult times. Governments, the healthcare community and the public are increasingly concerned about the growth of health spending and the sustainability of their healthcare systems. The current economic crisis—the most intense, comprehensive and long lasting in post-war Europe—with its corollary of tax revenue falling, increased social needs and financial failure of the States, has contributed decisively to accentuate this concern, and placed health spending (along other items of social spending) as a critical aspect of the policies to control public sector deficits. While some of the contemporary concerns are directly related to the current economic crisis the recession has exerabated pre-existing problems. The pressures on all healthcare systems are familiar but resistant to resolution. First, there have been changes in morbidity patterns with the emergence of chronicity and multi-morbidities as the main drivers of healthcare utilization in developed countries. Disease is now evolving into a continuum of exacerbations and relapses leading to long-term functional impairment. These new morbidity patterns require changes in existing organizational structures and the integration of fragmented healthcare delivery systems. Unfortunately an evidence base to facilitate such innovation is absent. Second, the acceleration of technological change (in preventive, diagnostic, therapeutic, surgical, biological, imaging and other technologies), with a very rapid incorporation of new drugs, tests and devices into routine clinical practice has fuelled expenditure inflation. These new technologies sometimes involve significant clinical innovations (although not always cost-effectively) and, in other cases, the ‘innovation’ is limited to increased in prices (rather than to improved clinical outcomes). The combination of new drugs and technologies …

Funding AIDS programmes in the era of shared responsibility: an analysis of domestic spending in 12 low-income and middle-income countries.

As the incomes of many AIDS-burdened countries grow and donors' budgets for helping to fight the disease tighten, national governments and external funding partners increasingly face the following question: what is the capacity of countries that are highly affected by AIDS to finance their responses from domestic sources, and how might this affect the level of donor support? In this study, we attempt to answer this question. We propose metrics to estimate domestic AIDS financing, using methods related to national prioritisation of health spending, disease burden, and economic growth. We apply these metrics to 12 countries in sub-Saharan Africa with a high prevalence of HIV/AIDS, generating scenarios of possible future domestic expenditure. We compare the results with total AIDS financing requirements to calculate the size of the resulting funding gaps and implications for donors. Nearly all 12 countries studied fall short of the proposed expenditure benchmarks. If they met these benchmarks fully, domestic spending on AIDS would increase by 2·5 times, from US$2·1 billion to $5·1 billion annually, covering 64% of estimated future funding requirements and leaving a gap of around a third of the total $7·9 billion needed. Although upper-middle-income countries, such as Botswana, Namibia, and South Africa, would become financially self-reliant, lower-income countries, such as Mozambique and Ethiopia, would remain heavily dependent on donor funds. The proposed metrics could be useful to stimulate further analysis and discussion around domestic spending on AIDS and corresponding donor contributions, and to structure financial agreements between recipient country governments and donors. Coupled with improved resource tracking, such metrics could enhance transparency and accountability for efficient use of money and maximise the effect of available funding to prevent HIV infections and save lives. US Centers for Disease Control and Prevention.

Report Predicts Fewer Uninsured but More Growth in Health Spending

Report Predicts Fewer Uninsured but More Growth in Health Spending

Mental health reform: increased resources but limited gains.

is the prime vehicle for monitoring the mental health system reform agenda outlined in the Australian Government’s National Mental Health Strategy. We consider here what the 2013 report tells us about the progress of that agenda.First, we know that mental health expenditure, after 18 years of mirroring growth in overall health spending, in the 2010–11 financial year accounted for an increased proportion of health spending within the health sector. The direct-care workforce employed in mental health services increased by 72% between 1992–93 and 2010–11.Second, the mix of services provided has improved. Inpatient care has moved from stand-alone psychiatric hospitals to psychiatric beds in general hospitals, while state and territory funding of ambulatory care services increased by 291% from 1992–93 to 2010–11. Between 2006–07 and 2010–11, the percentage of the population receiving Medicare-funded primary mental health care services rose from 3.1% to 6.9%, correlating to Medicare Benefits Schedule expenditure on mental health services increasing from $474 million to $852 million.Encouragingly, gains have also been made in other areas. Rates of use of licit and illicit drugs that contribute to mental illness in young people have decreased. For example, in 2010, 19% of 14–29-year-olds used cannabis, compared with 36% in 1998.

National health expenditure projections, 2013-23: faster growth expected with expanded coverage and improving economy.

In 2013 health spending growth is expected to have remained slow, at 3.6 percent, as a result of the sluggish economic recovery, the effects of sequestration, and continued increases in private health insurance cost-sharing requirements. The combined effects of the Affordable Care Act's coverage expansions, faster economic growth, and population aging are expected to fuel health spending growth this year and thereafter (5.6 percent in 2014 and 6.0 percent per year for 2015-23). However, the average rate of increase through 2023 is projected to be slower than the 7.2 percent average growth experienced during 1990-2008. Because health spending is projected to grow 1.1 percentage points faster than the average economic growth during 2013-23, the health share of the gross domestic product is expected to rise from 17.2 percent in 2012 to 19.3 percent in 2023.

Health spending slowdown is mostly due to economic factors, not structural change in the health care sector.

The source of the recent slowdown in health spending growth remains unclear. We used new and unique data on privately insured people to estimate the effect of the economic slowdown that began in December2007 on the rate of growth in health spending. By exploiting regional variations in the severity of the slowdown, we determined that the economic slowdown explained approximately 70percent of the slowdown in health spending growth for the people in our sample. This suggests that the recent decline is not primarily the result of structural changes in the health sector or of components of the Affordable Care Act, and that-absent other changes in the health care system-an economic recovery will result in increased health spending.

Financial impact of the GFC: health care spending across the OECD.

Since the onset of the global financial crisis (GFC), health spending has slowed markedly or fallen in many OECD countries after years of continuous growth. However, health spending patterns across the 34 countries of the OECD have been affected to varying degrees. This article examines in more detail the observed downturn in health expenditure growth, analysing which countries and which sectors of health spending have been most affected. In addition, using more recent preliminary data for a subset of countries, this article tries to shed light on the prospects for health spending trends. Given that public sources account for around three-quarters of total spending on health on average across the OECD, and, in an overall context of managing public deficits, the article focuses on the specific areas of public spending that have been most affected. This study also tries to link the observed trends with some of the main policy measures and instruments put in place by countries. The investigation finds that while nearly all OECD countries have seen health spending growth decrease since 2009, there is wide variation as to the extent of the slowdown, with some countries outside of Europe continuing to see significant growth in health spending. While all sectors of spending appear to have been affected, initial analysis appears to show the greatest decreases has been experienced in pharmaceutical spending and in areas of public health and prevention.

The contribution of health systems research to HSR: time to know what we are talking about, and why it is important for evidence-based policy-making

Within health services research (HSR), health systems research addresses the macro level of health care, i.e. the level of nations or regions, and the issues related to the organization and governance of the system, its model of financing, the ways to create physical and human resources, the provision of services, as well as its changes over time. According to the WHO Tallinn Charter a health system is “... the ensemble of all public and private organizations, institutions and resources mandated to improve, maintain or restore health. Health systems encompass both personal and population services, as well as activities to influence the policies and actions of other sectors to address the social, environmental and economic determinants of health”. This is only one of many definitions used around the world. Although there is strong global consensus on the need to strengthen health systems, there is no consensus on an established framework or a common definition that could help students, researchers, policy-and decision-makers in studying, comparing, reforming and analyzing health systems. This leads to misunderstandings and different interpretations about scope, transferability of experiences, functions and goals; failed interventions with undesired side effects; and flawed assessments and feedback. This is problematic particularly also because health systems have become increasingly complex and are rapidly changing. Moreover, health systems have to address important macro level challenges, which may vary greatly around the globe. Whereas a low-income country may be faced with low health spending, limited capacity to raise revenue, a rapidly growing population and lack of access to care of good quality, a typical high-income country could be struggling with unsustainable growth in health spending, a rapidly ageing population and increasing OOP. However, both have a similar challenge: how to best utilize scarce resources. It is therefore of great value to recognise and adopt organizational and technical innovations that can help make health care more effective and efficient. This calls for more understanding and more empirical evidence on both intended and unintended consequences of different types of action on health systems. Therefore, it is time for a common concept of the many elements of health systems, the dynamics between these elements, the different approaches chosen around the world - and last but not least, how to research and evaluate these in order to provide an evidence base for better policy-making. The backbone of the presentation will be a simplified triangular model of a health system, outlining the main players and their interactions, which is particularly suitable to systematically describe, compare and analyze the arrangements used in health systems.

Calling All American Physician Leaders

Calling All American Physician Leaders

The impact of American and British involvement in Afghanistan and Iraq on health spending, military spending and economic growth

Had there been no involvement in Afghanistan and Iraq, how much lower would military and health spending have been in the US and the UK? And what is the total effect of war on real output variations as compared with its counterfactual? We use a synthetic control method and find that while the UK and the US have experienced similar relative increases in health spending, especially towards the end of the 10-year window, the effect on military spending is much more pronounced in the US. We find that the combined cumulative costs amount to more than 17% of the US GDP and more than 9% of the UK GDP. Moreover, there are no robust signs of a convergence between the true and counterfactual levels of military spending while health spending shows a level shift in the last 5 years in both countries. Finally, there is no evidence of changes in the national income following the sharp increase in defense spending.

National Health Spending In 2012: Rate Of Health Spending Growth Remained Low For The Fourth Consecutive Year

For the fourth consecutive year, growth in health care spending remained low, increasing by 3.7percent in 2012 to $2.8trillion. At the same time, the share of the economy devoted to health fell slightly (from 17.3percent to 17.2percent) as the nominal gross domestic product (GDP) grew by 4.6percent. Faster growth in hospital services and in physician and clinical services was mitigated by slower growth in prices for prescription drugs and nursing home services. Despite an uptick in enrollment growth, Medicare spending growth slowed slightly in 2012, mainly due to lower payment updates. For Medicaid, slowing enrollment growth kept spending growth near historic lows. Growth in private health insurance spending also remained near historically low rates in 2012, largely influenced by the nation's modest economic recovery and its impact on enrollment.

The Pursuit Of Improved Physical And Mental Health

The Pursuit Of Improved Physical And Mental Health

Does Misery Index Matter for the Persistence of Health Spending? Evidence from OECD Countries

This paper employs the panel smooth transition regression (PSTR) model to investigate the role of Okun’s misery index in the persistence of health spending in 19 OECD countries from 1980 to 2010. The empirical result shows that the health spending in the sample countries displays a nonlinear dynamic path and a high level of persistence. Compared to the constant persistence of the health spending in the linear model, the persistence effect in our constructed PSTR model depends on one-period lagged Okun’s misery index, which varies with time and across countries. In addition, there is a trade-off for the governments of 19 OECD countries to lower misery index and suppress the growth of health spending. In particular, the negative impact of one-period lagged misery index on the persistence is increasing (decreasing) when one-period lagged misery index is below (above) its threshold value (i.e., 11.1333 %). Finally, a high persistence of health spending means that current health spending is less disturbed by current shocks. Thus, revising health care system is more efficient than improving macroeconomic conditions for a government to suppress the growth in health spending.

National Health Expenditure Projections, 2012–22: Slow Growth Until Coverage Expands And Economy Improves

Health spending growth through 2013 is expected to remain slow because of the sluggish economic recovery, continued increases in cost-sharing requirements for the privately insured, and slow growth for public programs. These factors lead to projected growth rates of near 4 percent through 2013. However, improving economic conditions, combined with the coverage expansions in the Affordable Care Act and the aging of the population, drive faster projected growth in health spending in 2014 and beyond. Expected growth for 2014 is 6.1 percent, with an average projected growth of 6.2 percent per year thereafter. Over the 2012-22 period, national health spending is projected to grow at an average annual rate of 5.8 percent. By 2022 health spending financed by federal, state, and local governments is projected to account for 49 percent of national health spending and to reach a total of $2.4 trillion.

Are We Finally Ready for Medicare-Pay Reform?

Are We Finally Ready for Medicare-Pay Reform?

Regulatory Neutrality Is Essential To Establishing A Level Playing Field For Accountable Care Organizations

Accountable care organizations (ACOs) are among the most widely discussed models for encouraging movement away from fee-for-service payment arrangements. Although ACOs have the potential to slow health spending growth and improve quality of care, regulating them poses special challenges. Regulations, particularly those that affect both ACOs and Medicare Advantage plans, could inadvertently favor or disfavor certain kinds of providers or payers. Such favoritism could drive efficient organizations from the market and thus increase costs or reduce quality of and access to care. To avoid this type of outcome, we propose a general principle: Regulation of ACOs should strive to preserve a level playing field among different kinds of organizations seeking the same cost, quality, and access objectives. This is known as regulatory neutrality. We describe the implications of regulatory neutrality in four key areas: antitrust, financial solvency regulation, Medicare governance requirements, and Medicare payment models. We also discuss issues relating to short-term versus long-term perspectives--to promote the goal of regulatory neutrality and allow the most efficient organizations to prevail in the marketplace.

The Slowdown In Health Care Spending In 2009–11 Reflected Factors Other Than The Weak Economy And Thus May Persist

During and immediately after the recent recession, national health expenditures grew exceptionally slowly. During 2009-11 per capita national health spending grew about 3 percent annually, compared to an average of 5.9 percent annually during the previous ten years. Policy experts disagree about whether the slower health spending growth was temporary or represented a long-term shift. This study examined two factors that might account for the slowdown: job loss and benefit changes that shifted more costs to insured people. Based on an examination of data covering more than ten million enrollees with health care coverage from large firms in 2007-11, we found that these enrollees' out-of-pocket costs increased as the benefit design of their employer-provided coverage became less generous in this period. We conclude that such benefit design changes accounted for about one-fifth of the observed decrease in the rate of growth. However, we also observed a slowdown in spending growth even when we held benefit generosity constant, which suggests that other factors, such as a reduction in the rate of introduction of new technology, were also at work. Our findings suggest cautious optimism that the slowdown in the growth of health spending may persist--a change that, if borne out, could have a major impact on US health spending projections and fiscal challenges facing the country.