Macro-level efficiency of health expenditure

Estimates for 15 major economies

Bibliographic Data

ID4589062
AuthorsSimiao Chen (0000-0003-0555-2157, Chinese Academy of Medical Sciences & Peking Union Medical College), Michael Kühn (0000-0003-0424-3221, International Institute for Applied Systems Analysis), Klaus Prettner (0000-0002-8971-8750, International Institute for Applied Systems Analysis), David E Bloom (0000-0003-3731-3345, Harvard Global Health Institute), C Wang (0000-0001-7857-5435, China-Japan Friendship Hospital, corresponding author)
Year2021
Volume287
Pages114270
Publication date2021-10-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueSocial Science & Medicine (JOURNAL)
Journal identifiersISSN: 0277-9536 • E-ISSN: 1873-5347
PublisherElsevier BV (PUBLISHER)
DOI10.1016/j.socscimed.2021.114270
PMID34482274
OpenAlexW3186607963
LanguageEN
Citations received8
References cited66

The coronavirus disease 2019 (COVID-19) pandemic highlights the importance of strong and resilient health systems. Yet how much a society should spend on healthcare is difficult to determine because additional health expenditures imply lower expenditures on other types of consumption. Furthermore, the welfare-maximizing ("efficient") aggregate amount and composition of health expenditures depend on efficiency concepts at three levels that often get blurred in the debate. While the understanding of efficiency is good at the micro- and meso-levels-that is, relating to minimal spending for a given bundle of treatments and to the optimal mix of different treatments, respectively-this understanding rarely links to the efficiency of aggregate health expenditure at the macroeconomic level. While micro- and meso-efficiency are necessary for macro-efficiency, they are not sufficient. We propose a novel framework of a macro-efficiency score to assess welfare-maximizing aggregate health expenditure. This allows us to assess the extent to which selected major economies underspend or overspend on health relative to their gross domestic products per capita. We find that all economies under consideration underspend on healthcare with the exception of the United States. Underspending is particularly severe in China, India, and the Russian Federation. Our study emphasizes that the major and urgent issue in many countries is underspending on health at the macroeconomic level, rather than containing costs at the microeconomic level

Aggregate expenditure · Consumption (sociology · Economic growth · Economics · Environmental health · Gross domestic product · Health care · Macro · Market economy · Per capita · Population · Public economics · Welfare · Global Health Care Issues · Healthcare Policy and Management · Healthcare Systems and Reforms · Medicine