The health care system reform currently under the scrutiny of the US Congress has provoked numerous debates about the virtues of the universal health care coverage. Arguments are made in an article by Brown and Khoury , that residents in OECD countries with universal health care are more likely to be confident in the health care system, than in the OECD countries without such a system. The purpose of this model is to determine if the presence of the universal health care system in a country affects significantly the life expectancy of a resident of that country. Thus, life expectancy is the dependent variable measuring the quality of the health care system. Total expenditures on health care, infant mortality and death rate are used as control variables and the binary universal health care variable is the independent variable of main interest.
The best model estimated is presented in Equation 1 and more details about the complete definition of the variables along with the table of summary statistics and a table of the models tried for this study can be found in the Appendices B, C, D. The model used 30 OECD countries and the data available for the 2005 year because it was the most recent year with complete data. The countries used are enumerated in Appendix A.
LE=(1.723)UHC+(0.239)TE-(0.407)IM-(0.654)DR (Equation 1)
Adj. R2 = 0.8253
Prob > F = 0.0000
where LE = Life Expectancy at Birth (years)
UHC = Universal Health Care (1 – if the country has Universal Health Care System, 0 – if it doesn’t)
TE = Total Expenditures on Health, as % of GDP
IM = Infant Mortality Rate ( per 1000 live births)
DR = Death Rate (per 1000 people)
In other models I tried to determine the significance of the expenditures broken down on public and private, but it turned out that they only introduced more bias in the coefficients and reduced the adjusted R squared. The model presented in Equation 1 has all the coefficients significant in the expected direction and a high adjusted R squared statistic. The influences of the coefficients determined through this model are also important. If one is a citizen of an OECD country with an universal health care system, one is likely to live on average 1.723 more years than one who lives in a country without universal health care.
The limitation to this model is the low number of observations on which the regression was done. For a better model, a larger pool of countries should be used. Additionally, one could also distinguish between the types of universal health care systems: single-payer, two-tier or insurance mandate.
In conclusion, provision of universal health care is important for the health care performance and policy advocates and politicians should definitely take into account this opportunity for reform. In United States, 15 percent of the population does not have health insurance. By introducing universal health care, these people could have access to better health care and more chances for success.
REFERENCES:
[1] Ian T. Brown and Christopher Khoury, “In OECD Countries, Universal Healthcare Gets High Marks”. Published August 20th 2009. Retrieved September 16th 2009, from:
http://www.gallup.com/poll/122393/OECD-Countries-Universal-Healthcare-Gets-High-Marks.aspx
[2] List of Countries with Universal Healthcare. Published August 9th 2009. Retrieved September 16th, 2009 from:
http://truecostblog.com/2009/08/09/countries-with-universal-healthcare-by-date/#link3
APPENDIX A - The List of Countries Used in the Model
TOTAL: 30 OECD countries
Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States
APPENDIX B - Description of all variables used
UHC = Universal Health Care variable is a binary number indicating the presence or absence of a system providing universal health care to the citizens.
The Data was taken from: http://www.gallup.com/poll/122393/OECD-Countries-Universal-Healthcare-Gets-High-Marks.aspx
LEB = Life Expectancy at Birth the average number of years that a person at that age can be expected to live, assuming that age-specific mortality levels remain constant.
The Data was taken from: http://www.irdes.fr/EcoSante/DownLoad/OECDHealthData_FrequentlyRequestedData.xls
TE = Total Expenditures on Health Care as a percentage of GDP. is defined as the sum of expenditure on activities that – through application of medical, paramedical, and nursing knowledge and technology – has the goals of:
- Promoting health and preventing disease;
- Curing illness and reducing premature mortality;
- Caring for persons affected by chronic illness who require nursing care;
- Caring for persons with health-related impairments, disability, and handicaps who require nursing care;
- Assisting patients to die with dignity;
- Providing and administering public health;
- Providing and administering health programmes, health insurance and other funding arrangements.
The Data was taken from: http://www.irdes.fr/EcoSante/DownLoad/OECDHealthData_FrequentlyRequestedData.xls
IM = Infant Mortality. The number of deaths of children aged under one year of age that occurred in a given year, expressed per 1000 live births.
The Data was taken from: http://www.irdes.fr/EcoSante/DownLoad/OECDHealthData_FrequentlyRequestedData.xls
DR = Crude death rate indicates the number of deaths occurring during the year, per 1,000 population estimated at midyear. Subtracting the crude death rate from the crude birth rate provides the rate of natural increase, which is equal to the population growth rate in the absence of migration. Source: World Bank staff estimates from various sources including census reports, the United Nations Population Division's World Population Prospects, national statistical offices, household surveys conducted by national agencies, and Macro International
The Data was taken from: http://0-ddp-ext.worldbank.org.libcat.lafayette.edu/ext/DDPQQ/member.do?method=getMembers
HEPR = Private health expenditure includes direct household (out-of-pocket) spending, private insurance, charitable donations, and direct service payments by private corporations. Source: World Health Organization, World Health Report and updates and from the OECD for its member countries, supplemented by World Bank poverty assessments and country and sector studies, and household surveys conducted by governments or by statistical or international organizations.
The Data was taken from: http://0-ddp-ext.worldbank.org.libcat.lafayette.edu/ext/DDPQQ/member.do?method=getMembers
HEPU = Public health expenditure consists of recurrent and capital spending from government (central and local) budgets, external borrowings and grants (including donations from international agencies and nongovernmental organizations), and social (or compulsory) health insurance funds. Source: World Health Organization, World Health Report and updates and from the OECD for its member countries, supplemented by World Bank poverty assessments and country and sector studies.
The Data was taken from: http://0-ddp-ext.worldbank.org.libcat.lafayette.edu/ext/DDPQQ/member.do?method=getMembers
APPENDIX C - Table of summary statistics
APPENDIX D - Table with relevant estimated parameters and test statistics
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