Medical Spending Around the Developed World – University of Copenhagen

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29 May 2015

Medical Spending Around the Developed World

From 1995 to 2012, Danish health care expenditures as a percentage of GDP increased from 8% to 11%, compared to an OECD average of about 9%. This paper takes a closer look at individual health care expenditures. We look at health cost development over time, and we study the distribution in health costs over the population. The paper uses annual register data from Statistics Denmark for the entire Danish population from the beginning of the 1990s to 2014 on health costs linked to individual information on demographics, labor market status, family situation and wealth.

Mette Gørtz from University of Copenhagen collaborates with Bent Jesper Christensen and Malene Kallestrup-Lamb, Aarhus University, in this project.

The project forms part of the multi-country project “Medical Spending Around the Developed World” run by Eric French, University College London. This project compares different countries’ health care systems. The project is focused on measuring and comparing inequality in health across countries. In particular, the project looks at the distribution of medical spending across patients and over time.

Having access to individualized data also allows us to look at the concentration in health costs across individuals. Preliminary estimates suggest that the 10% highest spending patients account for more than half of all health care costs.

Individual health costs show strong persistence over time. We use state-of-the-art panel data estimators  to analyze concentration and persistence in health care costs. Our very detailed data combined with a sample of the entire population allows us to investigate the heterogeneity in individual health care processes over time. We hypothesize that persistence in health care costs varies across age groups, proximity to death, diagnoses, education, employment status and income.

Contact: Mette Gørtz
Project period: 2014-2017