Income Elasticity of Vaccines Spending versus General Healthcare Spending

Using cross‐country data on gross domestic product and national expenditure on vaccines, we estimate and compare the income elasticity of vaccine expenditure and general curative healthcare expenditure. This study provides the first evidence on the national income elasticity of vaccination spending. Both fixed and random effects models are applied to data from 84 countries from 2010 to 2011. The income elasticities for healthcare expenditure and vaccine expenditure are 0.844 and 0.336, respectively. Despite vaccines' high cost‐effectiveness, the national propensity to spend income on vaccines as income increases lags behind general health care. The low income elasticity of vaccine spending means that relying on economic growth alone will provide an unacceptably slow trajectory to achieving high vaccine coverage levels. Copyright © 2015 John Wiley & Sons, Ltd.     

Economic impact of public sector spending on health care

Public sector spending on health care clearly has a positive economic impact on local communities. Not only does such spending provide residents with better health care, but it is widely recognized as an investment that returns continual dividends in the form of better jobs, higher incomes, and additional state and local tax revenues. The results of a static input/output model shows that public sector spending on health care of approximately $46 billion (in 2009 dollars) in the state of Texas yields over 588,000 jobs, $74.2 billion in total output, $26.3 billion in personal income, $22 billion in employee compensation, and $1.8 billion in state and local taxes; it clearly has a considerable positive economic impact on local economies and their quest for economic development.     

Socioeconomic determinants of infant mortality: a worldwide study of 152 low-, middle-, and high-income countries

BACKGROUND: To reach the Millennium Development Goals for health, influential international bodies advocate for more resources to be directed to the health sector, in particular medical treatment. Yet, health has many determinants beyond the health sector that are less evident than proximate predictors. AIM: To assess the relative importance of major socioeconomic determinants of population health, measured as infant mortality rate (IMR), at country level. METHODS: National-level data from 152 countries based on World Development Indicators 2003 were used for multivariate linear regression analyses of five socioeconomic predictors of IMR: public spending on health, GNI/capita, poverty rate, income equality (Gini index), and young female illiteracy rate. Analyses were performed on a global level and stratified for low-, middle-, and high-income countries. RESULTS: In order of importance, GNI/capita, young female illiteracy, and income equality predicted 92% of the variation in national IMR whereas public spending on health and poverty rate were non-significant determinants when adjusted for confounding. In low-income countries, female illiteracy was more important than GNI/capita. Income equality (Gini index) was an independent predictor of IMR in middle-income countries only. In high-income countries none of these predictors was significant. CONCLUSIONS: The relative importance of major health determinants varies between income levels, thus extrapolating health policies from high- to low-income countries is problematic. Since the size, per se, of public health spending does not independently predict health outcomes, functioning health systems are necessary to make health investments efficient. Potential health gains from improved female education and economic growth should be considered in low- and middle-income countries.     

The impact of economic crisis on health-care consumption in Korea.

This study uses urban household income-expenditure survey data, national health insurance claims data, and public health centre surveys to examine the impact of economic crisis on the consumption of health services in Korea. The analysis shows that the health-care consumption of Korean households has been adversely affected by the recent economic crisis, as measured by amount of expenditure on health. Distributional implications for health sector use are also found. Whereas the use of medical services by upper income groups is only slightly affected by the economic crisis, lower income groups are spending relatively less on medical services. Of all households, unemployed households are hit hardest by the crisis. Analysis shows that for all households, the rate of expenditure decrease is relatively higher for drug expenditure than for expenditure on medical services. That is, facing declining income, people cut their spending in the area where the need is non-essential or less inevitable.     

A Healthy Health Sector is Crucial for Community Economic Development

Abstract: This study presents a detailed model for measuring the economic effects of the health sector on a local economy. The total effects of the health sector on employment, income, retail sales, and sales tax collection by health category (hospitals, doctors and dentists, nursing and residential facilities, other medical and health services, and pharmacies) is presented. The model's application in nine Oklahoma counties found that approximately 9 percent of the total employment for each county was directly working in the health sector. With multipliers ranging from 1.45 to 1.87 applied to measure the total effects, including secondary employment, the health sector accounted for approximately 14 percent of all employment. This study provides an overview of the model, which employs local data and county input-output multipliers. The study illustrates the usefulness and simplicity of the model by presenting results for Perry, OK.     

Private sector contributions and their effect on physician emigration in the developing world

The contribution made by the private sector to health care in a low- or middle-income country may affect levels of physician emigration from that country. The increasing importance of the private sector in health care in the developing world has resulted in newfound academic interest in that sector’s influences on many aspects of national health systems. The growth in physician emigration from the developing world has led to several attempts to identify both the factors that cause physicians to emigrate and the effects of physician emigration on primary care and population health in the countries that the physicians leave. When the relevant data on the emerging economies of Ghana, India and Peru were investigated, it appeared that the proportion of physicians participating in private health-care delivery, the percentage of health-care costs financed publicly and the amount of private health-care financing per capita were each inversely related to the level of physician expatriation. It therefore appears that private health-care delivery and financing may decrease physician emigration. There is clearly a need for similar research in other low- and middle-income countries, and for studies to see if, at the country level, temporal trends in the contribution made to health care by the private sector can be related to the corresponding trends in physician emigration. The ways in which private health care may be associated with access problems for the poor and therefore reduced equity also merit further investigation. The results should be of interest to policy-makers who aim to improve health systems worldwide.     

The economic crisis and its impact on health and health care in Latin America and the Caribbean

The economic crisis that struck most Latin American and Caribbean countries beginning in 1982 has caused sharp reductions in domestic investment and in imports; domestic consumption has been less affected, while public sector spending has responded in different degrees in different countries. In general, public spending on health decreased, sometimes quite dramatically, but some countries were able to maintain the real value of noninvestment spending for health by central governments. It is much harder to tell what may have happened to output of health services, and still harder to know how health status has been affected. Scattered evidence suggests two conclusions. First, worsened economic conditions can seriously damage health status, with effects on infant mortality and on the patterns of disease and death, especially for children. Second, these repercussions do not have to occur, and public programs designed specifically to maintain basic health services and to assure adequate nutrition are effective in offsetting the worst consequences of economic hardship.     

Input–output analysis on the economic impact of medical care in Japan

Objectives

Since the Cabinet’s decision concerning the Basic Policies 2005, the Japanese government has implemented specific measures to suppress increases in national medical care expenditure. However, we believe that the economic significance of medical care should be quantified in terms of its economic impact on national medical care expenditure. No one has examined the economic impact of all medical institutions in Japan using data from a statement of profits and losses. We used an input–output analysis to quantitatively estimate economic impact of medical care and examined its estimation range with a probabilistic sensitivity analysis.

Methods

To estimate the economic impact and economic impact multipliers of all medical institutions in Japan, an input–output analysis model was developed using an input–output table, statement of profits and losses, margin rates, employee income rates, consumption propensity and an equilibrium output model. Probabilistic sensitivity analysis was conducted using a Monte Carlo simulation.

Results

Economic impact of medical care in all medical institutions was ¥72,107.4 billion ($661.5 billion). This impact yielded a 2.78-fold return of medical care expenditure with a 95 % confidence interval ranging from 2.74 to 2.90.

Conclusion

Economic impact of medical care in Japan was two to three times the medical care expenditure (per unit). Production inducement of medical care is comparable to other industrial sectors that are highly influential toward the economy. The contribution to medical care should be evaluated more explicitly in national medical care expenditure policies.     

National Health Accounts in Developing Countries: Appropriate Methods and Recent Applications

Better information on the financing of the health sector is an essential basis for wise policy change in the area of health sector reform. Analysis of health care financing should begin with sound estimates of national health expenditure—total spending, the contributions to spending from different sources and the claims on spending by different uses of the funds. The member countries of the OECD have successfully established such comparative health expenditure accounts in terms of standardized definitions of the uses of funds and breakdowns by public and private sector sources. This has resulted in important research on health system differences which could explain variations in the level and composition of financing. The United States has developed a more detailed approach called National Health Accounts, which expands the OECD method into a more disaggregated ‘sources and uses’ matrix. In the developing countries, analysis of health expenditures has been much less systematic, despite several decades of calls by international researchers for more attention. This paper reviews previous work done in developing countries and proposes renewed attention to national health expenditures, adapting the recent experience of the United States. Because most developing countries have more pluralistic health financing structures than are found in most industrialized countries, an enhanced and adapted version of the ‘sources and uses’ matrix method is proposed. This method should be modified to address the relevant categories of expenditures prevalent in the developing countries. Examples of recent applications of such ‘national health accounts’ from the Philippines, Egypt, India, Mexico, Colombia and Zambia are presented. Experience to date suggests that development of sound estimates using this method in low and middle income countries is feasible and affordable. National health accounts estimates can significantly influence policy. They provide decision makers with a holistic picture of the health sector, showing the actual emphasis of spending and the roles of different payers. They also provide a consistent framework for modelling reforms and for monitoring the effects of changes in financing and provision. An easy to use software tool has been developed for training and data management. Regional networks of collaborating national groups are proposed as a first step in expanding use of the method and to gain both national and cross-national comparative benefits. © 1997 by John Wiley & Sons, Ltd.     

What We Say and What We Do: County-level Public Spending for Health Care

The purpose of this study is to examine county-level public spending for health care services in Kansas and to explain variation in spending levels with a model composed of population density, population age and per capita income. Data are abstracted from budget documents for all 105 counties in Kansas for the years 1994, 1995 and 1996. Health care expenditures are defined as county tax revenues spent for ambulance, hospitals, ambulatory care, home health services, nursing homes, and mental health and substance abuse services. Results show that Kansas counties spent between 12.1 percent and 13.6 percent of their budgets to fund local health care services between 1994 and 1996, spending more than $133 million in 1996 alone. In 10 counties, one-quarter to one-third of the budget went for health services. Low population density and relatively high per capita income explained nearly one-third of the variation in how much counties spent and an even greater proportion when analysis was limited to the most rural counties. Findings from this study suggest there may be a significant local commitment in the United States to publicly supported health care services, more support than typically recognized and perhaps more than is estimated in national health care spending data. Future research on the economic effects of the health sector on local communities should take account of local spending for health care, especially at the county level.     

Determinants of households’ food insecurity with severity dimensions in Pakistan: Varying estimates using partial proportional odds model

This study is conducted to determine the impact of some selected socioeconomic and demographic factors on households’ food insecurity in Pakistan. Data are taken from national‐level survey Household Integrated Income and Consumption Survey 2015–2016. Inclusion of gender dimensions of some important factors and estimation of varying estimates at four severity levels of households’ food insecurity status using partial proportional odds model may be considered unique features of the study. It is concluded that household's income, employment, agricultural income, donations, parental education level and some households’ characteristics are important factors for improving food security in Pakistan. Maternal education, and maternal paid employment compared to paternal education, and paternal paid employment show strong positive effects to improve severe food insecurity. Couple paid employment, livestock ownership and operating agricultural land seem to have the most effective role for improving food security. Social welfare programmes and religious institution of Zakat are helpful to cope with severe food insecurity in Pakistan. Some special efforts or development strategies are recommended to improve food insecurity of rural households and Baluchistan province. Moreover, the observed U‐type quadratic impact of household size and the adverse impact of dependency ratio induce effective policies to control high birth rate in Pakistan. Hence, creation of employment opportunities especially for women, appreciation of couple paid employment, easy access to education for women, steps to raise level of education, growth of agricultural sector, rural development, social welfare and development schemes for Baluchistan, and continuation of Benazir Income Support Program are recommended to overcome severe and moderate level food insecurity in Pakistan. Since socioeconomic conditions and food insecurity issues of developing countries and especially in South Asian countries are homogeneous and therefore, the analysis in this study might be relevant to South Asian region.     

Developing health insurance in transitional Asia

Many European and Asian economies are currently undergoing a process of economic transition away from state based command systems to market led economies. The impact of transition, such as a decline in public expenditure, break up of state enterprises and economic recession, has affected levels of funding available for social sectors. In the health sector, health insurance is being introduced as a way of alleviating the decline in funding arising from these processes. Most of the Former Soviet Union and a number of other Asian transition economies are currently introducing, extending or considering payroll based systems of health insurance. Comparisons with many Latin American countries, where social security based insurance has been encouraged since the first World War, can be illuminating. Experience suggests that, various factors have impeded or permitted development in these countries. General processes of economic change (transition factors) tend to affect all economies attempting to change the basis for public funding of services. Structural factors, such as urbanisation and the level of state or industrial employment, act as longer term inhibitors to the extension of coverage. These factors vary considerably across transition economies. This suggests that while a social security base for insurance may be a viable option for smaller industrialised European transitional economies, this is not the case for many of larger less industrialised economies. It is unclear how insurance will develop in the future. If a separate insurance fund is maintained it is important that its' purchasing function is developed. Otherwise it is not clear what value is added to the current health system. If entitlement is to be based on contribution, with the fund based on geographic or employment groups, systems for ensuring access for those not in employment and not classified as socially protected must be developed.     

Pharmaceutical expenditure and gross domestic product: Evidence of simultaneous effects using a two‐step instrumental variables strategy

This paper estimates the income elasticity of government pharmaceutical spending and assesses the simultaneous effect of such spending on gross domestic product (GDP). Using a panel dataset for 136 countries from 1995 to 2006, we employ a two‐step instrumental variable procedure where we first estimate the effect of GDP on public pharmaceutical expenditure using tourist receipts as an instrument for GDP. In the second step, we construct an adjusted pharmaceutical expenditure series where the response of public pharmaceutical expenditure to GDP is partialled out and use this endogeneity adjusted series as an instrument for pharmaceutical expenditure. Our estimations show that GDP has a strong positive impact on pharmaceutical spending with elasticity in excess of unity in countries with low spending on pharmaceuticals and countries with large economic freedom. In the second step, we find that when the quantitatively large reverse effect of GDP is accounted for, public pharmaceutical spending has a negative effect on GDP per capita particularly in countries with limited economic freedom.     

Influences of income and employment on psychological distress and depression treatment in Japanese adults

Objectives  

Psychological distress is a health issue of critical importance, especially in people of working age in developed countries, including Japan. This study examined the relationships of income and employment arrangement with psychological distress and treatment of depression in a national sample of Japanese adults.     

Health sector reform: making health development sustainable

Health sector reform is underway or under consideration.in countries throughout the world and at all levels of income. This paper presents an overview of key concepts and approaches to health sector reform in developing countries. Reform implies sustained, purposeful, and fundamental changes in the health sector. While it is difficult to define precisely what constitutes a true reform, there is widespread consensus that reform is a process of change involving the what, who, and how of health sector action. Health is increasingly included as an important goal of national development. It can make development more sustainable. The paper outlines some general and specific health sector reform strategies that can contribute to sustainable development for countries at all levels of income, although the strategies will differ in content and emphasis. Health sector reform should be based on an holistic view of the health sector. The paper presents two frameworks to aid in reform design: one highlighting the linkages between different institutional actors in the health sector; the second addressing linkages across different functional areas of reform action. In order to develop and carry out reform, information and analysis is needed. A variety of practical tools now available for this purpose are discussed, encompassing all the different areas of action. While tool development should continue, reform proponents already have much to work with. Given global interest, the importance of health sector reform in development strategies, and significant existing knowledge and experience, country level analysis and action should proceed vigorously.     

Are natural resources bad for health?

The purpose of this paper is to empirically examine whether economic dependence on various natural resources is associated with lower investment in health, after controlling for countries׳ geographical and historical fixed effects, corruption, autocratic regimes, income levels, and initial health status. Employing panel data for 118 countries for the period 1990–2008, we find no compelling evidence in support of a negative effect of resources on healthcare spending and outcomes. On the contrary, higher dependence on agricultural exports is associated with higher healthcare spending, higher life expectancy, and lower diabetes rates. Similarly, healthcare spending increases with higher mineral intensity. Finally, more hydrocarbon resource rents are associated with less diabetes and obesity rates. There is however evidence that public health provision relative to the size of the economy declines with greater hydrocarbon resource-intensity; the magnitude of this effect is less severe in non-democratic countries.     

Basic patterns in national health expenditure

Analysed in this paper are national health accounts estimates for 191 WHO Member States for 1997, using simple comparisons and linear regressions to describe spending on health and how it is financed. The data cover all sources - out-of-pocket spending, social insurance contributions, financing from government general revenues and voluntary and employment-related private insurance - classified according to their completeness and reliability. Total health spending rises from around 2-3% of gross domestic product (GDP) at low incomes (< 1000 US dollars per capita) to typically 8-9% at high incomes (> 7000 US dollars). Surprisingly, there is as much relative variation in the share for poor countries as for rich ones, and even more relative variation in amounts in US dollars. Poor countries and poor people that most need protection from financial catastrophe are the least protected by any form of prepayment or risk-sharing. At low incomes, out-of-pocket spending is high on average and varies from 20-80% of the total; at high incomes that share drops sharply and the variation narrows. Absolute out-of-pocket expenditure nonetheless increases with income. Public financing increases faster, and as a share of GDP, and converges at high incomes. Health takes an increasing share of total public expenditure as income rises, from 5-6% to around 10%. This is arguably the opposite of the relation between total health needs and need for public spending, for any given combination of services. Within public spending, there is no convergence in the type of finance - general revenue versus social insurance. Private insurance is usually insignificant except in some rich countries.     

COPING WITH THE ECONOMIC CONSEQUENCES OF ILL HEALTH IN INDONESIA

We assess the economic risk of ill health for households in Indonesia and the role of informal coping strategies. Using household panel data from the Indonesian socio‐economic household survey (Susenas) for 2003 and 2004, and applying fixed effects Poisson models, we find evidence of economic risk from illness through medical expenses. For the poor and the informal sector, ill health events impact negatively on income from wage labour, whereas for the non‐poor and formal sector, it is income from self‐employed business activities which is negatively affected. However, only for the rural population and the poor does this lead to a decrease in consumption, whereas the non‐poor seem to be able to protect current household spending. Borrowing and drawing on family network and buffers, such as savings and assets, seem to be key informal coping strategies for the poor, which may have negative long‐term effects. While these results suggest scope for public intervention, the economic risk from income loss for the rural poor is beyond public health care financing reforms. Rather, formal sector employment seems to be a key instrument for financial protection from illness, by also reducing income risk. © 2015 The Authors. Health Economics Published by John Wiley & Sons, Ltd.     

A time-series analysis of health care expenditures in the United States, Germany, and Canada

This paper is a time-series analysis of the determinants of national health care expenditures in the United States, Germany, and Canada. The findings tend to confirm that the following are significantly and positively associated with national health care expenditures across the three countries in the study: (1) national income; (2) system overutilization, as measured by physician visits; (3) the share of the population aged sixty-five or older; (4) supplier-induced demand (specifically the physician-to-population ratio in the U.S. and Canada and the bed-to-population ratio in Germany); and (5) the intensity of care, as measured by hospital staff per occupied bed. The findings also tend to confirm the existence of negative price elasticities for health care in each of the three countries. Moreover, the results of this study do not support the argument that greater public sector participation in the health care system necessarily leads to higher levels of health care spending in the case of the U.S. and Canada. In Germany, however, state health care provision and financing have apparently exerted significant upward pressure on health care expenditure levels.     

Education determines a nation's health, but what determines educational outcomes? A cross-national comparative analysis

This study is premised on the notion that public health policy should address not only health itself, but also primary determinants of health. We examined the effect of national policies on educational outcomes, in particular, on adolescent reading literacy (ARL). We compared the effect of traditional policy indicators--national income and educational spending--with income inequality, a measure of redistributive policies. We used Organization for Economic Cooperation and Development (OECD) data that provide a rare opportunity to test policy effects after accounting for competing individual-, school-, and country-level explanations. Our sample consisted of 119,814 students, 5126 schools, and 24 countries. Multilevel/Hierarchical regression findings were striking: GDP had a significant, but negligible effect on ARL scores (β=0.002, SE=0.0008), while educational spending had no significant effect. By contrast, income inequality exhibited a larger inverse association (β=-1.15, SE=0.57). Among the wealthy nations in OECD, additional economic prosperity and educational spending is trumped by distribution of income for its effect on ARL. Our study yielded a striking result about education, a major determinant of health. Not only is income inequality a significant determinant of ARL scores, but direct spending on education and overall national economic prosperity are not.