Convergence of health care spending and health outcomes in the EUropean Union, 1960-95

John Nixon (pinewood.hill@btinternet.com)

No 183chedp, Working Papers from Centre for Health Economics, University of York

Abstract: Convergence in health expenditure in the countries of the European Union (EU) has been demonstrated to be occurring in previous studies. The aim of this paper is to identify and discuss the reasons for this finding and to present new evidence confirming convergence in health outcomes, as represented by life expectancy and infant mortality rates. The statistical methods used, s and b-convergence analysis, are well established in macro-economic growth analyses and based on the neo-classical growth model which predicts convergence in income for homogenous countries such as those forming the EU. The analyses reveal a common trend in that Southern Mediterranean countries have generally exhibited upward convergence towards the mean in health expenditure, and convergence towards the EU mean in improving directions for health outcomes. In contrast, EU countries of the North, particularly those of Scandinavia, exhibit downward convergence towards the EU mean or below it in health expenditure, whilst their health outcome measures have generally been displaying a decreasing advantage over the EU mean over the periods of analysis. The results are briefly considered in relation to the factors that help to explain the results, including the question of whether a causal relationship between health expenditure and health outcomes exists, the nature and impact of health care reforms throughout the 1970s, 80s and 90s in countries contributing most to the observed convergence, and the predictions of the neoclassical growth model which underpin the results.

Keywords: convergence; divergence; health expenditure; health outcomes; causal relationship (search for similar items in EconPapers)
Pages: 27 pages
Date: 2000-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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