Public Health Expenditure and the Budget Constraint

• Autor(a) principal: Barros, Pedro Pita
• Data de Publicação: 1997
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10362/89002
• topic: Health expenditure; Budget constraint; Public spending

The last two decades have witnessed a decrease in public health expenditure relative to total health spending. One may ask whether this decreasing role of Government expenditure in the financing of health care is due to mature options on the desired health care system or is more the result of Governments complying with more binding budget constraints. In this paper, we provide a first answer to this question, based on evidence for a set of OECD countries. The main point of the paper can be easily stated: the observed smaller role of public financing of health expenditures in total public expenditure is the result, to a significant extent, of exogenous political pressures for lower Government budget deficits. Given an overall budget ceiling, there is no evidence supporting a general time change in health spending priority in the budget bargaining process. However, we do find that Government budget constraints lead to lower priority of health care in the Government's budget allocation process. This conclusion seems to hold whether health public spending is determined by a bargaining process within the Government or by population needs. At least, the empirical evidence provided suggests that more research on the political process governing health care expenditures is desirable.