Globalization and healthcare policy: a constraint on growing expenditures

Abstract:

Research on globalization and social policy has indicated that differentiating between policy fields is a promising way to disentangle the complex relationship between global economic integration and welfare states. Moreover, while there is a specific literature on healthcare spending, it has so far neglected globalization as a potential influence. Consequently, this article examines the impact of globalization on healthcare expenditure. We probe, in addition, whether the relationship varies between different types of healthcare systems. We analyse 22 Organization for Economic Co-operation and Development (OECD) states from 1980 to 2009 in pooled time-series regressions. The results show that an increase in economic openness leads to lower spending growth. As theoretically expected, this relation is stronger in countries with social health insurance systems. This suggests that growing costs of healthcare are increasingly seen as a burden in international economic competition. Owing to strong secular trends of increasing expenditure, it does not translate into lower levels but lower growth of expenditure.