Health Expenditure Data Research Articles

Death Related Costs Hypothesis in the Czech Health Care System - The Present and the Future

Growing concern about fiscal sustainability with respect to the population ageing has given rise to a large debate on the role of age in the context of health care expenditure. Growing evidence on the so called death related costs hypothesis arguing that the positive relationship between age of the cohort and related health care expenditure is the result of growing probability of death changes significantly influencing of the projections. The aim of this paper is to explore the importance of the death related costs hypothesis in the Czech health expenditure data and the impact of the hypothesis on the projection of the financial sustainability of the Czech health care system.

Regional inequality in China's health care expenditures

This paper has two parts. The first part examines the regional health expenditure inequality in China by testing two hypotheses on health expenditure convergence. Cross-section regressions and cluster analysis are used to study the health expenditure convergence and to identify convergence clusters. We find no single nationwide convergence, only convergence by cluster. In the second part of the paper, we investigate the long-run relationship between health expenditure inequality, income inequality, and provincial government budget deficits (BD) by using new panel co-integration tests with health expenditure data in China's urban and rural areas. We find that the income inequality and real provincial government BD are useful in explaining the disparity in health expenditure prevailing between urban and rural areas. In order to reduce health-spending inequality, one long-run policy suggestion from our findings is for the government to implement more rapid economic development and stronger financing schemes in poorer rural areas.

Modelling health expenditure at the household level in Greece

Health expenditure data are known to be afflicted by restricted range, zero values, skewness and kurtosis. Several methods for modelling such data have been suggested in the literature to cope with these problems. This paper compares the performance of several alternative estimators, including two-part models and generalised linear models. The dependent variable is household expenditure on health care in Greece, a country where out-of-pocket health expenditure is higher than anywhere else in the European Union, whether as a proportion of GDP, as a share of all health spending, or in per capita terms. To facilitate comparison of model performance, household health expenditure is examined in two different specifications: expenditure on all health care (where zero values are rare) and expenditure on hospital services alone (where zero values are common). In the case of expenditure on all health care, three of the estimators performed almost equally well in terms of three alternative model performance indicators: a modified two-part model with non-linear least squares in the second part, a constant-variance generalised linear model and a variance-proportional-to-mean generalised linear model. In the case of expenditure on hospital services, the constant-variance generalised linear model out-performed the rest. The findings suggest that no estimator is best under all circumstances, while most alternative estimators are likely to produce relatively similar results. The paper concludes by discussing implications for further research.

Modelling household expenditure on health care in Greece

Health expenditure data are known to be afflicted by restricted range, zero values, skewness and kurtosis. Several methods for modelling such data have been suggested in the literature to cope with these problems. This paper compares the performance of several alternative estimators, including two-part models and generalized linear models. The dependent variable is household, not individual, expenditure on health care in Greece, a country where out-of-pocket health expenditure is higher than anywhere else in the European Union, whether as a proportion of GDP, as a share of all health spending, or in per capita terms. To facilitate comparison of model performance, household health expenditure is examined in two different specifications; expenditure on all health care (where zero values are rare) and expenditure on hospital services alone (where zero values are common). Three of the estimators performed almost equally well in terms of mean square error and mean absolute prediction error; a modified two-part model with non-linear least squares in the second part, a constant-variance generalized linear model, and a varianceproportional- to-mean generalized linear model. The findings suggest that no estimator is best under all circumstances, while most alternative estimators produce similar results. The paper concludes by discussing implications for further research.

Health Care Expenditure and GDP: An African Perspective

This paper sheds light on the magnitude of income elasticity of health care expenditure in Africa. The existing literature has to date focused on developed countries due to scarcity of health expenditure data in developing countries. We here exploit panel data techniques that combine time-series and cross-section data whilst also enabling a substantial increase in testing power. This study constitutes the first attempt to explore the income elasticity of health care expenditure for 28 African countries in a panel dimension over the decade 1991 - 2000. In addition to aggregate health expenditure, we model public and private health expenditures separately. Public health expenditure is found to be a luxury good while private health expenditure a necessity. This is not too surprising in the context of Africa, where the public sector has to strive hard to provide basic health care to the poor majority but a rich minority can easily afford hi-tech private health care. Furthermore the income elasticity of public health expenditure is found to be pro-cyclical while that of private health expenditure is counter-cyclical, thereby reinforcing our previous findings.

Issues in Health Care: Interventional Pain Management at the Crossroads

Emerging strategies in health care are extremely important for interventional pain physicians, as well as with the payors in various categories. While most Americans, including the US Congress and Administration, are looking for ways to provide affordable health care, the process of transformation and emerging health care strategies are troubling for physicians in general, and interventional pain physicians in particular. With the new Congress, only new issues rather than absolute solutions seem to emerge. Interventional pain physicians will continue to face the very same issues in the coming years that they have faced in previous years including increasing national health care spending, physician payment reform, ambulatory surgery center reform, and pay for performance. The national health expenditure data continue to extend the spending pattern that has characterized the 21st century, with US health spending continuing to outpace inflation and accounting for a growing share of the national economy. Health care spending in 2005 was $2.0 trillion or $6,697 per person and represented 16% of the gross domestic product. In 2005, Medicare spending reached $342 billion, while Medicaid spending was $315 billion. Physician and clinical services occupied approximately 21% of all US health care spending in 2005, reaching $421.2 billion. Overall, health spending in the US is expected to double to $4.1 trillion by 2016, then consuming 20% of the nation's gross domestic product, up from the current 16%. It is predicted that by 2016 the government will be paying 48.7% of the nation's health care bill, up from 38% in 1970 and 40% in 1990. The Medicare Physician Payment system based on the Sustainable Growth Rate (SGR) formula continues to be a major issue for physicians. The Congressional Budget Office has projected budget implications of change in the SGR mechanism, with consideration for allowing payment rates to increase by the amount of medical inflation, costing Medicare an estimated $218 billion from 2007 to 2016. Changes in the physician fee schedule in 2006 using the bottom-up methodology have resulted in significant cuts for interventional pain physicians performing procedures in an office setting. Medicaid physician payments and ambulatory surgery center payments for interventional techniques are proposed to be reduced substantially by Medicare and Medicaid, while hospital payments remain at stable levels with increases.

Demand for Health Expenditure Data by Global Health Initiatives

Demand for Health Expenditure Data by Global Health Initiatives

An examination of skewed health expenditure data from the Medical Expenditure Panel Survey (MEPS)

The expenditure data from MEPS have been shown to exhibit a marked positive skewness, with a few high expenditure respondents and many low or zero expenditure respondents. As a consequence of this departure from the normal distribution, the frequency with which a conventional confidence interval for a MEPS expenditure estimate will not capture the true population parameter may be higher than the probability stated for the confidence interval.

Determinants of Health Expenditure Growth of the OECD Countries: Jackknife Resampling Plan Estimates

Due to the lack of internal consistency across unit root and cointegration test methods for short time-series data, past research findings conflict on whether the OECD health expenditure data are stationary. Stationarity reasonably guarantees that the estimated OLS relationship is nonspurious. This paper departs from past investigations that applied asymptotic statistical tests of unit root to insufficient time-series lengths. Instead, data were calibrated in annual growth rates, in 5-year (1968-72, ..., 1993-97) partitions, for maximum likelihood estimation using flexible Box-Cox transformations model and bias-reducing jackknife resampling plan for data expansion. The drivers of OECD health care spending growth are economic and institutional. Findings from the growth convergence theory affirm that health care expenditure growth accords with conditional beta convergence. Statistical significance and optimal functional form models are not unique across the growth period models. Our findings exemplify the benefits of jackknife resampling plan for short data series, and caution researchers against imposing faulty functional forms and applying asymptotic statistical methods to short time-series regressions. Policy implications are discussed.

Unit root and cointegration tests: timeseries versus panel estimates for international health expenditure models

Classical regression estimates of the determinants of the OECD health expenditures are useful for policy formulation and evaluation. However, if the underlying timeseries data are not collectively stationary in levels, the estimated parameters are faulty and can misguide health policy. Until very recently, the crucial stationarity tests were ignored in a large number of studies on international comparisons. Stationarity (ADF, Phillips-Perron, IPS heterogeneous panel) and cointegration (Engle-Granger bivariate, Johansen's multivariate) tests are conducted here using 1960–1997 health expenditures data (1998 CD ROM) of 19 OECD countries. It is found that extending the time series data length affects the order of integration and number of cointegrating vectors. However, it is arguable whether the order of integration decreases or increases as more observations are added for testing. The failure of the Johansen and Engle-Granger cointegration tests for most of the OECD countries cautions policy makers against reliance on earlier research findings that were based on unstable relationships among variables in the regression models. (This is not the case for the UK, Greece and Ireland; policy implications have been derived for the UK.) Consequently, data calibrated in growth rates may be more appropriate for investigating the long run relationships collectively in a panel of OECD health expenditure model specifications.

The relationship between modifiable health risks and group-level health care expenditures. Health Enhancement Research Organization (HERO) Research Committee.

To assess the relationship between modifiable health risks and total health care expenditures for a large employee group. Risk data were collected through voluntary participation in health risk assessment (HRA) and worksite biometric screenings and were linked at the individual level to health care plan enrollment and expenditure data from employers' fee-for-service plans over the 6-year study period. The setting was worksite health promotion programs sponsored by six large private-sector and public-sector employers. Of the 50% of employees who completed the HRA, 46,026 (74.7%) met all inclusion criteria for the analysis. Eleven risk factors (exercise, alcohol use, eating, current and former tobacco use, depression, stress, blood pressure, cholesterol, weight, and blood glucose) were dichotomized into high-risk and lower-risk levels. The association between risks and expenditures was estimated using a two-part regression model, controlling for demographics and other confounders. Risk prevalence data were used to estimate group-level impact of risks on expenditures. Risk factors were associated with 25% of total expenditures. Stress was the most costly factor, with tobacco use, overweight, and lack of exercise also being linked to substantial expenditures. Modifiable risk factors contribute substantially to overall health care expenditures. Health promotion programs that reduce these risks may be beneficial for employers in controlling health care costs.

Standard errors for the retransformation problem with heteroscedasticity

Economists often estimate models with a log-transformed dependent variable. The results from the log-transformed model are often retransformed back to the unlogged scale. Other studies have shown how to obtain consistent estimates on the original scale but have not provided variance equations for those estimates. In this paper, we derive the variance for three estimates — the conditional mean of y, the slope of y, and the average slope of y — on the retransformed scale. We then illustrate our proposed procedures with skewed health expenditure data from a sample of Medicaid eligible patients with severe mental illness.

National Health Accounts development: lessons from Thailand.

National Health Accounts (NHA) are an important tool to demonstrate how a country's health resources are spent, on what services, and who pays for them. NHA are used by policy-makers for monitoring health expenditure patterns; policy instruments to re-orientate the pattern can then be further introduced. The National Economic and Social Development Board (NESDB) of Thailand produces aggregate health expenditure data but its estimation methods have several limitations. This has led to the research and development of an NHA prototype in 1994, through an agreed definition of health expenditure and methodology, in consultation with peer and other stakeholders. This is an initiative by local researchers without external support, with an emphasis on putting the system into place. It involves two steps: firstly, the flow of funds from ultimate sources of finance to financing agencies; and secondly, the use of funds by financing agencies. Five ultimate sources and 12 financing agencies (seven public and five private) were identified. Use of consumption expenditures was listed under four main categories and 32 sub-categories. Using 1994 figures, we estimated a total health expenditure of 128,305.11 million Baht; 84.07% consumption and 15.93% capital formation. Of total consumption expenditure, 36.14% was spent on purchasing care from public providers, with 32.35% on private providers, 5.93% on administration and 9.65% on all other public health programmes. Public sources of finance were responsible for 48.79% and private 51.21% of the total 1994 health expenditure. Total health expenditure accounted for 3.56% of GDP (consumption expenditure at 3.00% of GDP and capital formation at 0.57% of GDP). The NESDB consumption expenditure estimate in 1994 was 180,516 million Baht or 5.01% of GDP, of which private sources were dominant (82.17%) and public sources played a minor role (17.83%). The discrepancy of consumption expenditure between the two estimates is 2.01% of GDP. There is also a large difference in the public and private proportion of consumption expenses, at 46:54 in NHA and 18:82 in NESDB. Future NHA sustainable development is proposed. Firstly, we need more accurate aggregate and disaggregated data, especially from households, who take the lion's share of total expenditure, based on amended questionnaires in the National Statistical Office Household Socio-Economic Survey. Secondly, partnership building with NESDB and other financing agencies is needed in the further development of the financial information system to suit the biennial NHA report. Thirdly, expenditures need breaking down into ambulatory and inpatient care for monitoring and the proper introduction of policy instruments. We also suggest that in a pluralistic health care system, the breakdown of spending on public and private providers is important. Finally, a sustainable NHA development and utilization of NHA for planning and policy development is the prime objective. International comparisons through collaborative efforts in standardizing definition and methodology will be a useful by-product when developing countries are able to sustain their NHA reports.

Public health expenditures and mortality in England and Wales, 1870–1914

Attempts to account for the pattern and progress of mortality decline in England and Wales in the nineteenth century have produced a literature in which something of a general accord exists over key factors involved. Historians acknowledge the influence of two broad trends of change: environmental improvements as a result of sanitary reform initiatives and nutritional improvements as a consequence of a rise in the general standard of living. Where discord has arisen is in the degree of attachment of individual historians to one or other of these trends as primary contributor. The study of mortality decline, which was the product of a complex amalgam of factors, has proved a complicated task. It is one whose outcome ultimately depends upon efforts to disaggregate and measure the influences of different factors involved. To date, attempts at the systematic measurement of certain key factors associated with mortality decline have lagged considerably behind acceptance of the importance of their measurement. An important omission has been a measure of the timing and dimensions of sanitary reform programmes which, via infrastructure development and environmental controls, had the potential to decrease the rate at which infectious diseases were transmitted. This article examines the trends which emerge from a quantification of local government expenditures on sanitary infrastructure and from attention to its phasing over time. We are concerned with two main issues: to what extent do public health expenditure data describe the public health effort, and how do trends in public health expenditure relate to the decline of mortality? Our subject is local authority sanitary reform as a factor in mortality decline and our focus is on the impact of the timing of public health expenditure rather than the reasons for that timing. We do not examine inter-relationships between sanitary reform and other factors contributing to mortality decline such as income levels and density factors. A call for a more comprehensive study of the sanitary undertakings of local government has been common amongst historians of nineteenth-century mortality decline. It has been acknowledged on both sides of the ‘nutrition versus sanitation’ debate that a probable causal relationship exists between sanitary reforms and declining mortality levels. What has been lacking is a study of sufficient scale and detail to enable comprehensive evaluation.

Developing countries' health expenditure information: what exists and what is needed?

In the past decade, the scarcity of financial resources for the health sector has increasingly led countries to take stock of national health resources used, review allocation patterns, assess the efficiency of existing resource use, and study health financing options. The primary difficulties in undertaking these analyses have been 1) the lack of information on health expenditures and 2) not using existing information to improve the planning and management of health sector resources. The principle sources of available health expenditure information are reported by organizations such as the World Bank, WHO, UNICEF and OECD. Special studies and non-routine information are a second major source of information. This existing data has a number of difficulties, including being sporadic, inconsistency, inclusion of only national level public expenditure, high opportunity and maintenance costs, quantitative and qualitative differences across countries, and validity and interpretability problems. Reliable health expenditure data would be useful not only for in-country, national purposes, but also for cross-national comparisons and for development agencies. Country uses of health expenditure data include policy formulation and planning and management, while international uses would facilitate examination of cross-national comparisons, reviews of existing programmes and identification of funding priorities. Collaborative efforts between countries and international development agencies, as well as between agencies, are needed to establish guidelines for health expenditure data sets. This development must ensure that the resulting information is of direct benefit to countries, as well as to agencies. Results of such collaborative efforts may include a set of standardized methodologies and tools; standardized national health accounts for developing countries; and training to enhance national capabilities to actively use the information. The opportunities for such collaboration are unique with the issuance of the World Development Report 1993, to build on this work in clearly identifying what is needed and proposing a standardized data set and the tools necessary to regularly and economically gather such data.

Primary health care is viable.

'Selective primary health care' and other recent vertical health strategies have been justified on the grounds that the broad primary health care (PHC) approach cannot be afforded by developing countries in the present constrained economic circumstances. This judgement is too sweeping. A simulated case example is presented, starting with baseline health expenditure data that are representative of the situation in many developing countries. It is assumed that real economic growth occurs and that government funding of health care is allowed to grow in parallel. Two annual growth rates are considered: 2 and 5 per cent. Two restrictive conditions are applied: none of the main health services is subjected to absolute cuts; and, additional funds from existing or new sources of finance are not considered. It is shown that, even with slow growth rates, substantial increases in the funding of priority (rural and PHC) services can be achieved if the growth in expenditures of lower-priority services is curtailed. Also, savings from improved health service efficiency can be channelled to priority services. The message is that the PHC approach is viable even with slow economic growth. What is required is the technical capacity to identify and plan resource flows in the health sector, and the political will to effect resource allocations according to PHC priorities. A strategic policy like PHC should not be 'adjusted' out of effective existence because of reversible economic problems. Rather, actions should be taken to reverse the adverse economic environment. International health-related agencies should continue to support countries to develop national health systems based on PHC, and should campaign for reforms in the world economy to create at least the minimum economic conditions necessary for PHC implementation.