DETERMINANTS OF OUT OF POCKET HEALTH EXPENDITURES IN OECD COUNTRIES: DYNAMIC PANEL DATA ANALYSIS

Abstract

Health expenditures are constantly increasing for various reasons in the world. Increasing health expenditures caused different financing models to be adopted in each country. Although financing with tax revenues or health insurances is common, the share of out-of-pocket expenditures has also been increasing in recent years. Out-of-pocket health expenditures are direct payments made by individuals and households from their own resources in exchange for healthcare requests. The aim is to reduce unnecessary healthcare demand by ensuring the contribution of individuals to healthcare costs. However, while demand is being reduced by out-of-pocket spending, the catastrophic and impoverishing effects on especially poor families should not be disregarded. In this study, the main determinants of out-of-pocket health expenditures have been analyzed with the Dynamic Panel Data Model using the data of the 33 OECD member countries from 2000 to 2016. As a result of the analysis, it is observed that the increase in public health expenditures in accordance with the theoretical expectations decreased out-of-pocket health expenditures, and the share of out-of-pocket health expenditures increased as the age dependency rate increased. Again, in accordance with the theory, it is concluded that economic growth increases out-of-pocket expenditures.