The relationship between medical innovation and health expenditure before and after health reform

Objectives

This study explores the relationship between a group of medical innovations and a set of health care expenditure variables before the introduction of health reform and after.

Methods

We assessed two groups of data taken from the databases of the World Intellectual Property Organization and the Organisation for Economic Co-operation and Development (OECD) for the periods of 1990–2000 (before health reform) and 2001–2011 (after health reform). The number of patent publications in relation to medical technology, biotechnology, and pharmaceuticals was considered indicators of medical innovation. The total public health expenditure, health expenditure per capita, and health expenditure as a share of GDP were considered indicators of health care expenditure. Our dataset included 14 OECD countries that introduced health care reforms between 2000 and 2012. Canonical correlation analysis was used to measure the degree of association.

Results

There is a strong positive correlation between medical innovation and health care expenditure before (r_c,b?=?0.91; p?r_c,a?=?0.94; p?

Conclusions

Improved communication channels within societies increase international co-operation, and cost–benefit analysis of medical innovation may help in continuing to improve medical innovation and health care accessibility. We hope that our observations promote the understanding of the relationship and balance between medical innovation and health care expenditure while fostering an incentive atmosphere for health reforms.