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Is There a Statistical Relationship between Economic Crises and Changes in Government Health Expenditure Growth? An Analysis of Twenty-Four European Countries

Authors

  • Jonathan Cylus B.A,

    Corresponding author
    • European Observatory on Health Systems and Policies & LSE Health, London School of Economics and Political Science, London, UK
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  • Philipa Mladovsky M.Sc.,

    1. London School of Economics and Political Science, European Observatory on Health Systems and Policies & LSE Health, London, UK
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  • Martin McKee M.D., D.Sc.

    1. London School of Hygiene and Tropical Medicine, European Observatory on Health Systems and Policies, London, UK
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Address correspondence to Jonathan Cylus, B.A., European Observatory on Health Systems and Policies & LSE Health, London School of Economics and Political Science, Cowdray House, Houghton Street, London WC2A 2AE, UK; e-mail: j.d.cylus@lse.ac.uk

Abstract

Objective

To identify whether, by what means, and the extent to which historically, government health care expenditure growth in Europe has changed following economic crises.

Data Sources

Organization for Economic Cooperation and Development Health Data 2011.

Study Design

Cross-country fixed effects multiple regression analysis is used to determine whether statutory health care expenditure growth in the year after economic crises differs from that which would otherwise be predicted by general economic trends. Better understanding of the mechanisms involved is achieved by distinguishing between policy responses which lead to cost-shifting and all others.

Findings

In the year after an economic downturn, public health care expenditure grows more slowly than would have been expected given the longer term economic climate. Cost-shifting and other policy responses are both associated with these slowdowns. However, while changes in tax-derived expenditure are associated with both cost-shifting and other policy responses following a crisis, changes in expenditure derived from social insurance have been associated only with changes in cost-shifting.

Conclusions

Disproportionate cuts to the health sector, as well as reliance on cost-shifting to slow growth in health care expenditure, serve as a warning in terms of potentially negative effects on equity, efficiency, and quality of health services and, potentially, health outcomes following economic crises.

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