Health expenditure growth: Looking beyond the average through decomposition of the full distribution

Claudine de Meijer, O’Donnell, Owen, Marc Koopmanschap and Eddy Van Doorslaer
Authors registered in the RePEc Author Service: Owen O'Donnell

Journal of Health Economics, 2013, vol. 32, issue 1, 88-105

Abstract: Explanations of growth in health expenditures have restricted attention to the mean. We explain change throughout the distribution of expenditures, providing insight into how expenditure growth and its explanation differ along the distribution. We analyse Dutch data on actual health expenditures linked to hospital discharge and mortality registers. Full distribution decomposition delivers findings that would be overlooked by examination of changes in the mean alone. The growth rate of hospital expenditures is greatest at the middle of the distribution and is driven mainly by changes in the distributions of determinants. Pharmaceutical expenditures increase most rapidly at the top of the distribution and are mainly attributable to structural changes, including technological progress, making treatment of the highest cost cases even more expensive. Changes in hospital practice styles make the largest contribution of all determinants to increased spending not only on hospital care but also on pharmaceuticals, suggesting important spill over effects.

Keywords: Health care expenditure; Decomposition; Ageing; Pharmaceuticals; The Netherlands (search for similar items in EconPapers)
JEL-codes: I1 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:32:y:2013:i:1:p:88-105

DOI: 10.1016/j.jhealeco.2012.10.009

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