Understanding Differences in Health Care Spending: A Comparative Study of Prices and Volumes Across OECD Countries
Luca Lorenzoni, S. M. Dougherty
Abstract
Variations across OECD countries in the prices of health care and hospital services can be vast. These price differences mean that comparisons of such services should be adjusted to reflect the 'real' volumes consumed. Purchasing power parities (PPPs) can be used to make such comparisons more accurately, going beyond simple GDP-based comparisons, by aggregating the prices of actual individual consumption of health items. These health and hospital PPPs demonstrate that GDP PPPs are a weak substitute, as price structures vary widely. Moreover, there is tentative evidence that higher relative prices for health care tend to bloat health expenditure and are associated with lower life expectancy.
Topics & Concepts
Purchasing powerLife expectancyHealth careHealth spendingEconomicsConsumption (sociology)Purchasing power parityRelative priceInternational comparisonsHealth servicesDemographic economicsPurchasingEconometricsPublic economicsMonetary economicsMacroeconomicsMedicineEconomic growthEnvironmental healthHealth insuranceOperations managementPopulationSociologyExchange rateSocial scienceGlobal Health Care IssuesHealthcare Policy and ManagementHealth Systems, Economic Evaluations, Quality of Life