US Health Care Expenditures, GDP and Health Policy Reforms: Evidence from End-of-Sample Structural Break Tests

Ben Brewer (), Karen Smith Conway, Deniz Ozabaci and Robert S. Woodward
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Ben Brewer: University of Hartford
Karen Smith Conway: University of New Hampshire
Robert S. Woodward: University of New Hampshire

Eastern Economic Journal, 2022, vol. 48, issue 4, No 1, 487 pages

Abstract: Abstract This research investigates the over-time stability of the aggregate US healthcare expenditure (HCE)–GDP relationship, focusing on periods of healthcare reforms. The most consequential reforms—Medicaid/Medicare and the Affordable Care Act (ACA)—are challenging to study because they occur near the ends of the available data. Using annual national- and state-level data and a battery of structural break tests, we find the HCE–GDP relationship to be overwhelmingly stable. An ancillary analysis around the 2006 Massachusetts healthcare reform, which avoids the confounding effects of the Great Recession and the staggered rollout of the ACA, likewise finds no change.

Keywords: US health care expenditure; GDP; Income elasticity of health care; Multiple structural changes (search for similar items in EconPapers)
JEL-codes: C22 I11 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1057/s41302-022-00218-x

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