Assessing the responsiveness of out-of-pocket healthcare expenditure to macro-fiscal factors and different health financing systems: evidence from the European and OECD area

Purpose In this paper, the authors assess the responsiveness of OOP healthcare expenditure to macro-fiscal factors, as well as to tax-based, SHI, mixed systems and voluntary PHI financing. Although the relationship between OOP expenditure, macroeconomy, aggregate public and PHI financing is well documented in the existing empirical literature, little is known for the impact of several macro-fiscal drivers and the existing health financing arrangements associated with voluntary PHI on OOP expenditure. Design/methodology/approach The authors gather panel data by applying three official organizations' databases. They elaborate static and dynamic panel data methodology to a dataset of 49 European and OECD countries from 2000 to 2015. Findings The authors' findings do not indicate a considerable impact of GDP growth and general government debt as a share of GDP on OOP payments. Unemployment rate presents as a positive driver of OOP payments in all three compulsory national health systems post to the 2008 economic crisis. OOP payments are significantly influenced by countries' fiscal capacity to increase general government expenditure to GDP in SHI and mixed health systems. Additionally, study findings present that government health financing, irrespective of the different health systems structure characteristics, and OOP healthcare payments follow different directions. Voluntary PHI financing considerably counteracts OOP payments only in tax-based health systems. Practical implications In the backdrop of a new economic crisis associated to the COVID-19 epidemic, health policy planners have to deal with the emerging unprecedented challenges in financing of health systems, especially for these economies that have to face the fiscal capacity constraints owing to the 2008 financial crisis and its severe recession. Originality/value To the best of authors' knowledge, there is no empirical consensus on the effects of macro-fiscal parameters, different compulsory health systems financing associated with the parallel voluntary PHI institution funding on OOP expenditure, for the majority of European and OECD settings.

Automated summary

In this paper, the authors analyze the impact of macro-fiscal factors and different health systems financing, including voluntary PHI, on out-of-pocket healthcare expenditure. The study findings suggest that voluntary PHI financing significantly offsets out-of-pocket payments, especially in tax-based health systems.