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The European Journal of Health Economics

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01-06-2013 | Original Paper

Spending more money, saving more lives? The relationship between avoidable mortality and healthcare spending in 14 countries

Authors: Richard Heijink, Xander Koolman, Gert P. Westert

Published in: The European Journal of Health Economics | Issue 3/2013

Abstract

Healthcare expenditures rise as a share of GDP in most countries, raising questions regarding the value of further spending increases. Against this backdrop, we assessed the value of healthcare spending growth in 14 western countries between 1996 and 2006. We estimated macro-level health production functions using avoidable mortality as outcome measure. Avoidable mortality comprises deaths from certain conditions “that should not occur in the presence of timely and effective healthcare”. We investigated the relationship between total avoidable mortality and healthcare spending using descriptive analyses and multiple regression models, focussing on within-country variation and growth rates. We aimed to take into account the role of potential confounders and dynamic effects such as time lags. Additionally, we explored a method to estimate macro-level cost-effectiveness. We found an average yearly avoidable mortality decline of 2.6–5.3 % across countries. Simultaneously, healthcare spending rose between 1.9 and 5.9 % per year. Most countries with above-average spending growth demonstrated above-average reductions in avoidable mortality. The regression models showed a significant association between contemporaneous and lagged healthcare spending and avoidable mortality. The time-trend, representing an exogenous shift of the health production function, reduced the impact of healthcare spending. After controlling for this time-trend and other confounders, i.e. demographic and socioeconomic variables, a statistically significant relationship between healthcare spending and avoidable mortality remained. We tentatively conclude that macro-level healthcare spending increases provided value for money, at least for the disease groups, countries and years included in this study.

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The Akaike information criterion (AIC) could also be used for model selection; however, the BIC introduces a larger penalty for the inclusion of more parameters. This element is considered important here because of the limited size of the dataset and, consequently, the risk of overfitting.

We have: \( y_{t} = a_{ 0} + b_{ 0} X_{t} + b_{1} X_{t - 1} + b_{2} X_{t - 2} + \ldots ,\;{\text{and}}:\theta = b_{0} + b_{1} + b_{2} \;( = {\text{LRP}}) \)

Transforming makes: \( y_{t} = a_{ 0} + \theta X_{t} + b_{1} (X_{t - 1} - X_{t} ) + b_{2} (X_{t - 2} - X_{t} ) + \ldots \)…, see [48].

In order to measure the life years gained associated with declining rates of avoidable mortality, a reference norm for survivorship is needed. To that purpose we used country specific life-expectancy. In other words, the difference between (1) the life expectancy and (2) the average age at death (around 60 years in all countries) for those whose death could have been avoided determined the life years gained associated with a one unit decrease in total avoidable mortality.

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Title: Spending more money, saving more lives? The relationship between avoidable mortality and healthcare spending in 14 countries
Authors: Richard Heijink
Xander Koolman
Gert P. Westert
Publication date: 01-06-2013
Publisher: Springer-Verlag
Published in: The European Journal of Health Economics / Issue 3/2013
Print ISSN: 1618-7598
Electronic ISSN: 1618-7601
DOI: https://doi.org/10.1007/s10198-012-0398-3

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Spending more money, saving more lives? The relationship between avoidable mortality and healthcare spending in 14 countries

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