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More Health Expenditure, Better Economic Performance? Empirical Evidence From OECD Countries
Recent economic downturns have led many countries to reduce health spending dramatically, with the World Health Organization raising concerns over the effects of this, in particular among the poor and vulnerable. With the provision of appropriate health care, the population of a country could have b...
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Formato: | Online Artículo Texto |
Lenguaje: | English |
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SAGE Publications
2015
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Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5813635/ https://www.ncbi.nlm.nih.gov/pubmed/26310501 http://dx.doi.org/10.1177/0046958015602666 |
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author | Wang, Fuhmei |
author_facet | Wang, Fuhmei |
author_sort | Wang, Fuhmei |
collection | PubMed |
description | Recent economic downturns have led many countries to reduce health spending dramatically, with the World Health Organization raising concerns over the effects of this, in particular among the poor and vulnerable. With the provision of appropriate health care, the population of a country could have better health, thus strengthening the nation’s human capital, which could contribute to economic growth through improved productivity. How much should countries spend on health care? This study aims to estimate the optimal health care expenditure in a growing economy. Applying the experiences of countries from the Organization for Economic Co-Operation and Development (OECD) over the period 1990 to 2009, this research introduces the method of system generalized method of moments (GMM) to derive the design of the estimators of the focal variables. Empirical evidence indicates that when the ratio of health spending to gross domestic product (GDP) is less than the optimal level of 7.55%, increases in health spending effectively lead to better economic performance. Above this, more spending does not equate to better care. The real level of health spending in OECD countries is 5.48% of GDP, with a 1.87% economic growth rate. The question which is posed by this study is a pertinent one, especially in the current context of financially constrained health systems around the world. The analytical results of this work will allow policymakers to better allocate scarce resources to achieve their macroeconomic goals. |
format | Online Article Text |
id | pubmed-5813635 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2015 |
publisher | SAGE Publications |
record_format | MEDLINE/PubMed |
spelling | pubmed-58136352018-02-21 More Health Expenditure, Better Economic Performance? Empirical Evidence From OECD Countries Wang, Fuhmei Inquiry Original Research Recent economic downturns have led many countries to reduce health spending dramatically, with the World Health Organization raising concerns over the effects of this, in particular among the poor and vulnerable. With the provision of appropriate health care, the population of a country could have better health, thus strengthening the nation’s human capital, which could contribute to economic growth through improved productivity. How much should countries spend on health care? This study aims to estimate the optimal health care expenditure in a growing economy. Applying the experiences of countries from the Organization for Economic Co-Operation and Development (OECD) over the period 1990 to 2009, this research introduces the method of system generalized method of moments (GMM) to derive the design of the estimators of the focal variables. Empirical evidence indicates that when the ratio of health spending to gross domestic product (GDP) is less than the optimal level of 7.55%, increases in health spending effectively lead to better economic performance. Above this, more spending does not equate to better care. The real level of health spending in OECD countries is 5.48% of GDP, with a 1.87% economic growth rate. The question which is posed by this study is a pertinent one, especially in the current context of financially constrained health systems around the world. The analytical results of this work will allow policymakers to better allocate scarce resources to achieve their macroeconomic goals. SAGE Publications 2015-08-25 /pmc/articles/PMC5813635/ /pubmed/26310501 http://dx.doi.org/10.1177/0046958015602666 Text en © The Author(s) 2015 http://creativecommons.org/licenses/by-nc/3.0/ This article is distributed under the terms of the Creative Commons Attribution-NonCommercial 3.0 License (http://www.creativecommons.org/licenses/by-nc/3.0/) which permits non-commercial use, reproduction and distribution of the work without further permission provided the original work is attributed as specified on the SAGE and Open Access page(https://us.sagepub.com/en-us/nam/open-access-at-sage). |
spellingShingle | Original Research Wang, Fuhmei More Health Expenditure, Better Economic Performance? Empirical Evidence From OECD Countries |
title | More Health Expenditure, Better Economic Performance? Empirical Evidence From OECD Countries |
title_full | More Health Expenditure, Better Economic Performance? Empirical Evidence From OECD Countries |
title_fullStr | More Health Expenditure, Better Economic Performance? Empirical Evidence From OECD Countries |
title_full_unstemmed | More Health Expenditure, Better Economic Performance? Empirical Evidence From OECD Countries |
title_short | More Health Expenditure, Better Economic Performance? Empirical Evidence From OECD Countries |
title_sort | more health expenditure, better economic performance? empirical evidence from oecd countries |
topic | Original Research |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5813635/ https://www.ncbi.nlm.nih.gov/pubmed/26310501 http://dx.doi.org/10.1177/0046958015602666 |
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