A Study On The Influencing Factors And Sustainability Of Health Expenditure Growth

Without universal health,there will be no moderately prosperous society in all respects.Health is an inevitable requirement to promote people's all-round development and a basic condition for economic and social development.China has made remarkable achievements in the development of the health field,laying a foundation for the comprehensive establishment of a moderately prosperous society.With the aging of the population,changes in the disease spectrum,and changes in the ecological environment,residents' health needs are continuing to grow.Enhancing the coordination between development in the health field and economic and social development is a new issue the construction of a healthy China is facing.Health expenditure has always been the focus of health reform.Establishing a stable and sustainable health financing system is the foundation of health system construction.In 2009,a new round of health reform was launched,an additional 850 billion yuan was invested in health by the government.The overall goal is to establish and improve a basic health system that covers both urban and rural residents,and to provide the people with safe,effective,convenient,and affordable health care.With the construction of health accounts,China has produced national and regional health expenditure results,both by source and by provider,which can reflect the characteristics of health financing sources and institutional flows.The indicators such as the share of total health expenditure in GDP,government health expenditure in total health expenditure,out-of-pocket expenditure in total health expenditure have been documented as policy goals.When formulating corresponding health financing policies and health planning indicators,policy makers are facing several problems: first,what are the factors that influence the growth of health expenditure,and how do they affect health expenditure? Second,what are the shortterm trends in health expenditure growth and whether they can meet the expected policy goals? Third,what are the trends in health expenditure in the medium and long term,and are development goals relevant to health expenditure appropriate? What impact will policy intervention have on health expenditure?Firstly,based on the analysis of the current situation of health expenditure growth,an empirical analysis of the influencing factors is carried out,and the spatial model is used to explore the influence mechanism of each factor on the growth of health expenditure.The analysis of the current status of health expenditure in the country and regions reveals that health financing in China and in the regions has the following characteristics: First,health investment has gradually increased,and the adequacy of health financing has improved;second,the structure of health financing has been optimized.Residents have been provided risk protection;thirdly,the institutional allocation of health expenses was not efficient,and most health funds were concentrated in hospitals;fourthly,the sustainability of health financing under the new normal economy was facing challenges.At the same time,there are differences in the total funding,funding structure,and growth trend of health expenditure across regions.The influencing factor analysis section draws on international experience and combines with China's actual conditions,and incorporates population factors,income factors,production efficiency(Baumol's cost disease),technical factors,and policy factors into the analysis.Using panel data from various regions,it is found that income is the most important factor affecting the growth of China 's health expenditure.The income elasticity coefficient of health consumption is less than 1,which means health consumption is a necessity in China.Baumol's cost disease has a significant impact on health expenditure growth in China.The production efficiency of health industry is relatively slowly increased than the average economy,and the rising demand for rigid wages has promoted the increase of health costs in health instritutions.The increase in the degree of aging has no significant impact on health expenditure growth.The impact of technical factors on health expenditure growth is generally unsignificant,but the impact on government health expenditure is significantly positive.At the same time,the determinants affecting the growth of health in different regions are different.There is a significant spatial spillover effect in the growth of health expenditure between regions.The income factor and Baumol's cost disease not only have a positive impact on the growth of health expenditure growth in its own region,but also promote rising health expenditure in other regions.To answer the second question,short-term health expenditure projection models are tested,and the prediction results are compared with short-term policy goals.The short-term projection section uses various models to analyze the sources and the flow of institutions of health expenditure in Shanghai.The projection results show that both the time series model and the vector autoregressive model(VAR)can make short-term projection of health expenditure,and the combined model can take both models into account to further improve the accuracy.The combined model projection results show that in the short term,Shanghai 's total health expenditure by source will maintain a growth rate of over 10%,which is 4-5 percentage points higher than the GDP growth rate over the same period.The proportion of out-of-pocket health expenditure is expected to remain below 20%.In the context of the slowdown in the growth of government health expenditure and social health insurance expenditure,it is urgent to build a diverse financing channel to ensure the sustainability of health financing.The short-term growth rate of Shanghai's health expenditure by provider is below 10%,of which the growth rate of hospital expenditure is expected to be controlled to a certain extent,which is less than the growth rate of primary health care institutions in the same period.However,the proportion of expenditure of primary health institutions has not increased significantly,and the task of guiding patients and health funds to the primary level is still arduous.The third question is studied through the mid-to-long-term projection of Shanghai's health expenditure,and simulation analysis is carried out for several policies in the field of health care that are or will be implemented.The mid-to-long-term projection part uses the component model to conduct analysis based on Shanghai's health expenditure by consumption,which can be devided by disease and age group.The projection results show that the growth rate of Shanghai's health expenditure will remain above 10% from 2020-2025,with an average annual growth rate of 10.68%,and then the growth rate will slow down,with average annual growth rates of 6.79% in 2025-2030 and 5.66% in 2030-2035.The total health expenditure as a share of GDP is expected to exceed 9% after 2025,and to exceed 10%by 2035.The current health expenditure as a share of GDP will exceed 8% from 2024,reaching a stable level in OECD countries.The implementation of the Healthy Shanghai Initiative and various reforms in health system will have an impact on the future trend of health expenditure,and the rapid growth in health expenditure is expected to be alleviated to a certain extent: the implementation of the Noncommunicable Chronic Disease Prevention and Control Plan is expected to save 3.28% to 10.58% in total health expenditure;the implimentation of the grading diagnosis and treatment mechanism is expected to save 1.26% to 9.46% of the total health expenditure;and strengthening the cost control of medical institutions is expected to save 7.48% to 17.18% of the total health expenditure.The international health expenditure growth trend and cost control experience are worth learning from.The experience of OECD countries shows that the growth trend of health expenditure has gradually slowed down with economic growth and the improvement of the health system,and the proportion of health expenditure in GDP will not continue to increase.Since 2005,it has basically stabilized at 8-9%.The proportion of expenditure in recurrent health expenditures has also stabilized,ranging between 10% and 20% in recent years.The policies on health expenditure control in various countries are mainly launched from two levels of supply and demand.Policies for suppliers include reform of payment methods,introduction of market mechanisms,total amount control,price control,supply constraints,health technology assessment,etc.The gatekeeper system,the establishment of individual co-payment ratios,and basic medical service packages,etc.,various policies have different cost control effects in different countries,but it is more important to pay attention to ensuring the quality of medical services while achieving the cost control goals.The policies of graded diagnosis and treatment system and reform of payment methods provide reference.Based on the above analysis,the final conclusions and recommendations are given.Firstly,under the new normal economy,the growth of government and social expenditure on health has slowed down,and the sustainability of health financing is facing challenges.Secondly,income and Baumol's cost disease are the main factors driving the rise in health expenditure.Thirdly,appropriate health expenditure projection model can promote the sustainable development of health financing.Fourthly,the rapid growth of health expenditure needs to be intervened through policies,Shanghai 's health expenditure growth is expected to be eased in 2025,but still exceeds the GDP growth,the implementation of health policies such as Health Shanghai Initiative,hierarchical medical system and cost control actions can curb the rapid increase in health expenditure.The policy recommendations are as follows: Improve the sustainability of health financing by optimizing payment methods of health funds.Pay attention to the production efficiency in health providing system through salary and supply-side reform,promoting the regional coordination of health providing.Strengthen the cooperation between the government and academia,carrying out scientific health expenditure projection and decision-making analysis.In addition,start from the supply and demand side to provide a basis for further controlling the irrational growth of health expenditure and improving the construction of the health financing system.This study has 3 innovations:(1)Validate the existence of Baumol's cost disease in the field of health in China,and consider the effect of spatial factors on the mechanism of health expenditure growth.(2)Construct a combined model of time series and vector autoregressive models on the choice of projection methods has improved health expenditure prediction accuracy.(3)The use of component projection model by age and disease is helpful for the simulation analysis of policies.With the improvement of China's health expenditure accounting methods and data,the impact of related policies on health expenditure and policy simulation need to be further studied to provide more powerful evidence-based support for government decision-making.