Determinants of the National Health Expenditures: Panel Study

This study estimates the determinants of national health expenditures of OECD countries using panel regression method. The data used are OECD Health Data(2003) covering 33 countries and from 1970 to 2001. This study shows several important different results compared to the previous studies. Further this study estimates the determinants of Korean case using data from 1m to 2000, and compare with the results of OECD panel. The main findings are as follows. The income elasticity of health expenditures is estimated below 1.0, but is shown above 1.0 when the different health systems of each country are controlled. The women's labor participation influences strongly positive effect on the health expenditures. The diffusion of new technologies is positively related with the increasing expense. The increasing government expenditures have a tendency not to contain health expenses, but to increase expenses. The expansion of public health insurance holders is containing the expenses, and the increasing number of doctors is pushing expenditures. This implies the health expenditures are influenced more by the induced demand of providers rather than the moral hazard of patients. However, the above result is opposite in Korean case. The existence of primary care doctors affects slightly up warding rather than containing expenditures. Finally the determinants are seriously depending upon which factors are included in the model and which statistical model is chosen. Therefore it must be cautious to interpret the results of statistical model.

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