Health Expenditure Growth: Looking Beyond the Average Through Decomposition of the Full Distribution

Tinbergen Institute Discussion Paper 12-051/3

41 Pages Posted: 12 May 2012

See all articles by Claudine de Meijer

Claudine de Meijer

Erasmus University Rotterdam (EUR) - Erasmus Medical Center (MC)

Marc A. Koopmanschap

Erasmus University Rotterdam (EUR) - Erasmus Medical Center (MC)

Eddy van Doorslaer

Erasmus School of Economics

Owen O'Donnell

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Date Written: May 7, 2012

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 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 in expenditures on hospital care is strongest at the middle of the distribution and is driven mainly by changes in the distributions of determinants. Pharmaceutical expenditures increase most 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, aging, pharmaceuticals, the Netherlands

JEL Classification: I10

Suggested Citation

de Meijer, Claudine and Koopmanschap, Marc A. and van Doorslaer, Eddy and O'Donnell, Owen, Health Expenditure Growth: Looking Beyond the Average Through Decomposition of the Full Distribution (May 7, 2012). Tinbergen Institute Discussion Paper 12-051/3, Available at SSRN: https://ssrn.com/abstract=2054654 or http://dx.doi.org/10.2139/ssrn.2054654

Claudine De Meijer (Contact Author)

Erasmus University Rotterdam (EUR) - Erasmus Medical Center (MC) ( email )

Doctor Molewaterplein 40
Rotterdam, South Holland 3015 GD
Netherlands

Marc A. Koopmanschap

Erasmus University Rotterdam (EUR) - Erasmus Medical Center (MC) ( email )

Doctor Molewaterplein 40
Rotterdam, South Holland 3015 GD
Netherlands

Eddy Van Doorslaer

Erasmus School of Economics ( email )

Netherlands

Owen O'Donnell

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
72
Abstract Views
569
rank
349,971
PlumX Metrics