The relationship between health expenditures and various health indicators: A comparative country analysis

In this study, the causal relationship between specific health expenditures and various health indicators has been examined using time series analyses. The research data were compiled from official sources such as the OECD and the World Bank, covering the period from 2000 to 2020 for health indicators of Germany and France. The dependent variables include: gross domestic product per capita, hospital bed density (per 1,000 people), infant mortality rate (per 1,000 live births), life expectancy at birth (per 1,000 people), physician density (per capita), research and development expenditures, and average length of hospital stay. As independent variables, which remain constant across all analyses, the following were used: current health expenditure per capita, domestic general government health expenditure, and out-of-pocket expenditure (as a ratio of per capita health expenditure). Before determining the relationships between variables, all collected data were subjected to stationarity tests. The Augmented Dickey-Fuller (ADF) test was applied to each variable to determine the stationarity levels of the series (I(0), I(1)). The results of the analysis indicated that the series were non-stationary. To investigate relationships at the level values of the series, the Toda-Yamamoto causality test, which can be applied even when variables are non-stationary, was employed. According to the results of the Toda-Yamamoto causality test, in Germany, a causal relationship was found between current health expenditure per capita and both physician density and research and development expenditures. A causal relationship was also identified between domestic general government health expenditure and both physician density and research and development expenditures, while no causality was found between other health indicators. Additionally, no significant statistical relationship was found between out-of-pocket health expenditures and any of the other indicators. In France, a causal relationship was established between current health expenditure per capita and the infant mortality rate, whereas no causality was found among other variables. Causal relationships were also identified between domestic general government health expenditure and hospital bed density, physician density, R&D expenditures, and the average length of hospital stay. Furthermore, causality was found between out-of-pocket health expenditures and life expectancy at birth, R&D expenditures, and the average length of hospital stay.