Measuring National Health Expenditures

Abstract

Quantifying the growth of medical expenditures over decades or centuries is challenging. Attempting to do so reveals a number of inconsistencies, ambiguities and other measurement issues. The problems are both practical and conceptual. This article discusses national accounting frameworks, decomposing growth into inflation, real income per capita and demographic components, scaling and units of observation. The difficulties of quantifying rates of technological growth, distinguishing temporary fluctuations from enduring trend shifts, and establishment of geographic and temporal boundaries are examined. Fiscal inertia, expectations, lags and institutional rigidity are explored as factors complicating the dynamics of spending. National income, GDP and consumption expenditures are assessed as denominators for determination of health sector shares. Resource utilization and employment are evaluated for making extrapolations where expenditure measures are unavailable. The data sets and methods used to construct long run national health expenditures time series from disparate sources are presented along with source documentation.

Keywords: National Health Expenditures, Medicine, History, Forecasting, Macroeconomic Trends

JEL Classification: I10, C53, E01, H51, J11, N3, O1