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Publicly funded hospital care: expenditure growth and its determinants

Author

Listed:
  • Nigel Rice

    (Centre for Health Economics, University of York, UK)

  • María José Aragón

    (Centre for Health Economics, University of York, UK)

Abstract

Understanding the drivers of growth in health care expenditure is crucial for forecasting future health care requirements and for the efficient use of resources. We consider total hospital admitted care expenditure in England between 2009/10 and 2016/17. Decomposition techniques are used to separate changes in expenditure into elements due to changes in the distribution of characteristics, of both individuals and the services they receive, and due to changes in the impact of characteristics on expenditures. Growth in aggregate expenditure was due to increases in total patient admissions together with a substantial shift towards episodes of non-elective care, particularly the use of long-stay care. Decomposition of patient level expenditure suggests efficiency gains in treatment across the full distribution of expenditures, but that these were outweighed by structural changes towards a greater proportion of patients presenting with high-dimensional comorbidities. This is particularly relevant at the top end of the expenditure distribution and accounts for a large proportion of the total expenditure growth.

Suggested Citation

  • Nigel Rice & María José Aragón, 2021. "Publicly funded hospital care: expenditure growth and its determinants," Working Papers 177cherp, Centre for Health Economics, University of York.
    • Handle: RePEc:chy:respap:177cherp
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    File URL: https://www.york.ac.uk/media/che/documents/papers/researchpapers/CHERP177_funded_hospital_expenditure_growth.pdf
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    References listed on IDEAS

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    5. de Meijer, Claudine & O’Donnell, Owen & Koopmanschap, Marc & van Doorslaer, Eddy, 2013. "Health expenditure growth: Looking beyond the average through decomposition of the full distribution," Journal of Health Economics, Elsevier, vol. 32(1), pages 88-105.
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    Cited by:

    1. Kasteridis, Panagiotis & Rice, Nigel & Santos, Rita, 2022. "Heterogeneity in end of life health care expenditure trajectory profiles," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 221-251.
    2. Rachet-Jacquet, Laurie & Rocks, Stephen & Charlesworth, Anita, 2023. "Long-term projections of health care funding, bed capacity and workforce needs in England," Health Policy, Elsevier, vol. 132(C).

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    More about this item

    Keywords

    Health Care Expenditure Growth; decompositions; Hospital Episode Statistics;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • I1 - Health, Education, and Welfare - - Health

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