The relationship between health outcomes and health expenditure in Europe by using compositional data analysis

Abstract

The type of health system in each country and the resources devoted to it determine its outcomes. Relationships between ratios of expenditure to Gross Domestic Product (GDP) classified by provider and indicators reflecting health outcomes in 2015 are examined for 30 countries by means of a compositional data analysis and a regression analysis. The countries in the sample are the European Union (EU-28) countries plus Iceland and Norway. The outcome indicators used are life expectancy at birth (LE); healthy life years in absolute value at birth for females (HLYf) and for males (HLYm); and death rate due to chronic diseases (DR) (response variables). The results indicate that the higher the ratio of expenditure on retailers and other providers of medical goods in relation to other types of expenditure in the composition, the higher the DR indicator and the lower the LE indicator. The ratio of expenditure on residential long-term care facilities in the composition seems to have had a positive effect on both HLY indicators. The effect of expenditure ratios on providers of healthcare system administration and financing is not straightforward.