The Health Financing Transition: A Conceptual Framework and Empirical Evidence - Working Paper 358

Victoria Fan
Authors registered in the RePEc Author Service: Victoria Y. Fan

No 358, Working Papers from Center for Global Development

Abstract: Almost every country exhibits two important health financing trends: health spending per person rises and the share of out-of-pocket spending on health services declines. We describe these trends as a “health financing transition” to provide a conceptual framework for understanding health markets and public policy. Using data over 1995-2009 from 126 countries, we examine the various explanations for changes in health spending and its composition with regressions in levels and first differences. We estimate that the income elasticity of health spending is about 0.7, consistent with recent comparable studies. Our analysis also shows a significant trend in health spending e rising about 1 percent annually - which is associated with a combination of changing technology and medical practices, cost pressures and institutions that finance and manage healthcare. The out-of-pocket share of total health spending is not related to income, but is influenced by a country’s capacity to raise general revenues. These results support the existence of a health financing transition and characterize how public policy influences these trends.

Keywords: public health; health finance (search for similar items in EconPapers)
JEL-codes: I14 I15 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2014-03
New Economics Papers: this item is included in nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:cgd:wpaper:358

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