Testing the Grossman model of medical spending determinants with macroeconomic panel data

Hartwig, Jochen; Sturm, Jan‐Egbert

doi:10.1007/s10198-018-0958-2

Cited by 30 publications

(19 citation statements)

References 52 publications

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“…BCD was significant in China's health industry, which is consistent with OECD and other developing country studies using health accounting data [12][13][14]32] or calculated health expenditure data [22,23]. The particularity of the health industry determines its relatively slow improvement on production efficiency, while the rigid wage demand increases the health institutions cost, leading to the increase in health expenses.…”

Section: Income and Baumol's Cost Disease Drive China Health Expenditsupporting

confidence: 81%

Determinants of China's Health Expenditure Growth: Based on Baumol’s Cost Disease Theory

Wang

Chen

2021

Preprint

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Background During the past four decades, China's total health expenditure and health expenditure per capita have both experienced a dramatically increase in growth rate. It is essential to understand the driven force of this growth with the new economic context. This study aims to explore the determinants of health expenditure growth and the influencing mechanism of these determinants, with considering the productivity efficiency represented by Baumol's cost disease. Methods Based on the longitudinal data of 30 provincial-level administrative regions in China, from 2010 to 2017, multi-variates regression models were constructed to assess the determinants, including demography, income, Baumol's cost disease, technology, their effects on per capital total health expenditure growth and the three financing sources: government, society and out-of-pocket health expenditure. Moreover, the Spatial Durbin Model was used to analyze the influence mechanism of each factor on the increase of health expenditure across provinces.Results Among 210 province-year observations, all of the average growth rate of total health expenditure (12.78%) was much higher than the growth rate of per capita real GDP (8.06%). According to the statistical analysis, we found that:(1) Income and Baumol’s cost disease have significant positive impact on health expenditure growth(P<0.01). The impact of technical factors on government health expenditure is significantly positive. (2) The determinants affected the growth of health costs in different regions variably, the eastern region is mainly driven by Baumol's cost disease and technical factors, while the central and western regions are mainly affected by income factors and Baumol's cost disease. (3) There is a significant spatial spillover effect on the health expenditure growth between regions. The income factor and Baumol’s cost disease have a positive impact on the health expenditure growth in its own region as well as in other regions.Conclusions Income and Baumol's cost disease significantly contributed to China health expenditure increase growth. The health expenditure determinants showed spatial varies effect and space spillover effect on the neighborhood areas. Which indicates that a reasonable salary system should be contrasted to meet the changeling from the Baumol's cost disease, and the necessary of equity in health resource allocation among provinces in China.

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Section: Income and Baumol's Cost Disease Drive China Health Expenditsupporting

confidence: 81%

Determinants of China's Health Expenditure Growth: Based on Baumol’s Cost Disease Theory

Wang

Chen

2021

Preprint

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“…Consequently, by electing to forgo private healthcare, an opportunity cost is incurred when one chooses food and shelter consumption. In most cases, Blacks experience that, especially in developing countries [ 16 ]. As a result, the majority of Black people derive total satisfaction from public healthcare, while Whites and Indians derive their satisfaction from private healthcare [ 17 ].…”

Section: Literature Reviewmentioning

confidence: 99%

The Influence of Racial Differences in the Demand for Healthcare in South Africa: A Case of Public Healthcare

Mhlanga

Garidzirai

2020

IJERPH

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The study sought to analyse the influence of racial differences in the demand for public healthcare in South Africa, using the 2018 General Household Survey (GHS) data. This was completed to understand if race still plays a role in access to healthcare in post-apartheid South Africa. Logistic regression analysis revealed that race significantly explained the variance in demand for public healthcare, with White populations having the lowest probability of demand for public healthcare compared to other races. Consequently, the study noted that racial differences still play a critical role in affording one access to healthcare after assessing the situation obtaining in public healthcare. Therefore, the study recommends that the government of South Africa should create policies that encourage equal access to basic services in addressing racial inequality in the country.

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“…The theoretical framework utilized in the paper is the principal-agent problem and the Grossman’s (1972) model of health as derived demand. The Grossman (1972) model is derived from the model of optimal control, where health capital is a consumption good as well as an investment good and it has been argued to be amongst the major contributors to the theoretical framework of health economics [12]. This model made an important contribution to the literature by separating the biological health production function from the behavioral input demand function, allowing for the use of socio-economic inputs such as income and government expenditure in the production function estimation [6].…”

Section: A Theoretical Framework Of Health Expenditure and Health mentioning

confidence: 99%

The Impact of Public Health Expenditure on Health Outcomes in South Africa

Hlafa

Sibanda

Hompashe

2019

IJERPH

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Health holds an important position in maintaining economic development since it is both a prerequisite for and an outcome of economic development. This means that health contributes greatly to the attainment of sustainable development and health outcomes. The importance of health is demonstrated in the Millennium Development Goals (MDGs) where three of the eight goals are aimed at improving health outcomes. Despite progress made by other middle-income countries in achieving health-related MDGs, South Africa is still worse off in respect of health outcomes and experiences a challenge in attaining positive outcomes for these goals. This study’s main focus was to identify the association between public health expenditure and health outcomes in South Africa’s nine provinces from 2002 to 2016. The study implemented fixed effects and a random effects panel data estimation technique to control for time effects and individual provincial heterogeneity. This was followed by employing the Hausman specification test to identify the fixed effects model as the appropriate estimator for the study. The study also employed the seemingly unrelated regression (SUR) model and the least squares dummy variable (LSDV) model to examine the impact of public health expenditure on each province separately. The findings elucidated that the relationship between public health expenditure and health outcomes in South Africa varied across provinces depending on provincial management and infrastructure availability.

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Testing the Grossman model of medical spending determinants with macroeconomic panel data

Cited by 30 publications

References 52 publications

Determinants of China's Health Expenditure Growth: Based on Baumol’s Cost Disease Theory

Determinants of China's Health Expenditure Growth: Based on Baumol’s Cost Disease Theory

The Influence of Racial Differences in the Demand for Healthcare in South Africa: A Case of Public Healthcare

The Impact of Public Health Expenditure on Health Outcomes in South Africa

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