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Measuring recession severity and its impact on healthcare expenditure

Measuring recession severity and its impact on healthcare expenditure The financial crisis that manifested itself in late 2007 resulted in a Europe-wide economic crisis by 2009. As the economic climate worsened, Governments and households were put under increased strain and more focus was placed on prioritising expenditures. Across European countries and their heterogeneous health care systems, this paper examines the initial responsiveness of health expenditures to the crisis and whether recession severity can be considered a predictor of health expenditure growth. In measuring severity we move away from solely gross domestic product (GDP) as a metric and construct a recession severity index predicated on a number of key macroeconomic indicators. We then regress this index on measures of total, public and private health expenditure to identify potential relationships. Analysis suggests that for 2009, the Baltic States, along with Ireland, Italy and Greece, experienced comparatively severe recessions. We find, overall, an initial counter-cyclical response in health spending (both public and private) across countries. However, our analysis finds evidence of a negative relationship between recession severity and changes in certain health expenditures. As a predictor of health expenditure growth in 2009, the derived index is an improvement over GDP change alone. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Health Care Finance and Economics Springer Journals

Measuring recession severity and its impact on healthcare expenditure

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References (20)

Publisher
Springer Journals
Copyright
Copyright © 2013 by Springer Science+Business Media New York
Subject
Medicine & Public Health; Public Health; Economic Policy; Public Finance & Economics; Health Informatics; Statistics for Life Sciences, Medicine, Health Sciences; Statistics for Business/Economics/Mathematical Finance/Insurance
ISSN
1389-6563
eISSN
1573-6962
DOI
10.1007/s10754-012-9121-2
pmid
23417124
Publisher site
See Article on Publisher Site

Abstract

The financial crisis that manifested itself in late 2007 resulted in a Europe-wide economic crisis by 2009. As the economic climate worsened, Governments and households were put under increased strain and more focus was placed on prioritising expenditures. Across European countries and their heterogeneous health care systems, this paper examines the initial responsiveness of health expenditures to the crisis and whether recession severity can be considered a predictor of health expenditure growth. In measuring severity we move away from solely gross domestic product (GDP) as a metric and construct a recession severity index predicated on a number of key macroeconomic indicators. We then regress this index on measures of total, public and private health expenditure to identify potential relationships. Analysis suggests that for 2009, the Baltic States, along with Ireland, Italy and Greece, experienced comparatively severe recessions. We find, overall, an initial counter-cyclical response in health spending (both public and private) across countries. However, our analysis finds evidence of a negative relationship between recession severity and changes in certain health expenditures. As a predictor of health expenditure growth in 2009, the derived index is an improvement over GDP change alone.

Journal

International Journal of Health Care Finance and EconomicsSpringer Journals

Published: Feb 16, 2013

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