Concentration and Persistence of Healthcare Spending: Evidence from China

Hua Chen, Xiaobo Peng and Menghan Shen
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Xiaobo Peng: School of Economics, Central University of Finance and Economics, Beijing 102206, China
Menghan Shen: Center for Chinese Public Administration Research, School of Government, Sun Yat-sen University, Guangzhou 510275, China

Sustainability, 2021, vol. 13, issue 11, 1-17

Abstract: One way to reduce healthcare costs is to target the high spenders who remain persistently high in cost over time. Using claims data from China between 2010 to 2014, we sought to identify the level of concentration in spending and the proportion of spenders whose costs remain high over five years. Using a transition matrix and a linear regression strategy, we find that the top 10% of the spenders account for more than 50% of total expenditures. Of the individuals who were in the top 10% in 2010, 33.6% remained in the top 10% one year later and 23.6% were still in that category even four years later. Past spending plays a major role in the dynamic of health spending. A 10% increase in expenditure is associated with an increase of 0.36% to 1.33% of spending in the future. Persistence has some heterogeneity in terms of age, gender, and income level. Many diseases have strong predictive power for future spending. Research on the concentration and persistence of health expenditures will inform policymakers in terms of controlling costs and providing protection for catastrophic spending.

Keywords: health expenditures; spending persistence; spending concentration; health care reform; catastrophic spending protection; cost containment (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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