The Effects of Health Expenditures to Decrease Infant Mortality Rates in OECD Countries

The Effects of Health Expenditures to Decrease Infant Mortality Rates in OECD Countries

Funda Kara (Independent Researcher, Turkey) and İrfan Ersin (Istanbul Medipol University, Turkey)
DOI: 10.4018/978-1-7998-2329-2.ch014

Abstract

There is a positive relationship between the health level of the society and its economic development. The main reason is that improving quality of the lives and increasing lifetime has lead to higher economic performance. This evaluates the relationship between health expenditure and infant mortality rate in OECD countries. In the analysis process, 20 different countries in the OECD are selected and annual data of these countries for the years between 1980 and 2017 is evaluated with the help of Kao panel cointegration and Dumitrescu-Hurlin causality analysis. The findings show that there is long term relationship between health expenditure and infant mortality rates in OECD countries. Another important conclusion is that there is a causality analysis from health expenditure to the infant mortality rate. While considering these results, it is recommended that OECD countries should take some actions in order to increase health expenditure so that it can be possible to decrease infant mortality rate.
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Development Of Health Expenditures In The World

The amount a country spends on health can be influenced by a wide array of social and economic determinants. In addition, the financing of the health system, organizational structure and organizational structure can also affect. There is a close relationship between the income level of a country and the amount of expenditure of its population on health care (OECD/EU, 2018).

Health expenditures have been in an increasing trend all over the world in recent years. Health expenditures in developed countries are affected by the adoption of new medical technologies to treat chronic diseases. In developing countries are directed to cost-effective technologies to treat infectious diseases (Çelik et al., 2016).

Health expenditures are one of the important issues of discussion all over the world. In the historical process, health expenditures are generally seen to be in an upward trend. In the 1970s, the share of OECD countries in GNP for health was around 6% on average. This share has increased over the years (Martin et al., 2011).

Prior to 2009, average health expenditures were realized by 4-6% annually as a result of rising prices in the health sector. Moreover, health expenditures are closely following economic growth since 2012. For example, health expenditures per capita in Greece in 2017 (at 2010 prices) remained below the 2009 level of approximately 30%. In Portugal, Italy and Spain, per capita expenditure has reached pre-crisis levels. Health expenditures in Latvia and Estonia also declined significantly in the early periods of the crisis, but health expenditures continued to rise rapidly after this period. For these two countries, health expenditure in 2017 is about 40% of the 2009 level. Excluding Europe as well the rate of increase in health expenditures slowed down during the economic crisis. Health expenditures in Korea have increased by 6% on average since 2009. This shows that expenditure per capita in 2017 is 55% higher than in 2009. Australia, Canada and the United States have also increased steadily in this period, and expenditure per capita levels were 10-20% higher than in 2009. Health expenditures constituted 8.9% of gross domestic product (GDP) in 2016 (OECD, 2018)

Health expenditures in the United States (17.2% of GDP) represent a much larger part of the economy, followed by Switzerland (12.3%) and France (11.5%) as the second and third highest expenditure countries. Countries such as Turkey (4.2%) and Mexico (5.4%) have accounted for less than 6% of GDP. Each one of those country’s (Mexico, Turkey and Colombia) health expenditure is around one-tenth of the United States (approximately USD 1,000 per person) (OECD, 2018).

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