Monday, November 25, 2013

Putting brakes on health expenditure

Health at a Glance 2013

We already know it. Health expenditures are stagnating across OECD countries. The size of such stagnation and its potential impact is what really counts. About the size we may check it at the new report with 2011 data, and with this figure:


Now is a good moment to remember the arguments of inevitability of health expenditure: demography, income and the residual (technology, relative prices and institutions). Check this paper for the projections (a useless effort in my opinion). The income reduction and specially the drop in public income is the factor that explains such decrease. Therefore, those that consider health expenditure will always increase because there are forces "out of control" - ageing and technology- (as Bob Evans said and criticised) have been left without argument. They have been surpassed by the decision making of politicians and citizens when income falls. They have put the brakes on health expenditure and we don't know how long it will last. The issue is right now about the impact, are we destroying value or waste? Maybe in our country we are simply increasing "productivity" with labour cost cuts. A founded answer is needed.

PS. Detailed data in excel file, here

PS. More data, here. And the ppt, here.

PS. Per capita public health expenditure next year will be 1.095€ and this is a drop of 15,5% in the last 5 years. Definitely, such reality is underrepresented in the figure, in other words we may be outliers, do you know why?.

PS. If there is a cut on labour costs by 10% and at the same time a reduction in the "production" of visits by 10% (p.25), what happens to productivity?. Following standard methods...productivity stagnates! (a nonsense)

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