The impact of GDP on health care expenditure: the case of Italy (1982-2009)

The Italian health care expenditures, HCE, have been basically explained with two main groups of theories. (1) Those explaining the peculiarity of the HCE growth as depending on demand and supply factors, such as ageing population, public finance share of health care, number of practising physicians per capita, mix of public and private hospitals, number of hospital beds... (2) The theories explaining the growth of total public expenditure, per se, as a common feature of the industrialized countries. In this respect, a huge empirical literature on HCE has emphasised the role of GDP and/or other structural/institutional variables as the main determinants of HCE across countries. In order to reassess previous findings, here we test for cointegration the regional Italian data on HCE and GDP. The results shows that HCE and GDP are cointegrated. The long and the short-term dynamics of HCE are estimated, taking into account for cross-section correlation.