The political economy of the public-private mix in heath expenditure: an empirical review of thirteen OECD countries.

This study investigates the factors that may have influenced the public-private mix of health expenditure in 13 OECD countries from 1981 to 2007. The degree to which health services are socialized is regarded as the product of a trade-off between the desire to redistribute income through the fiscal system and the losses some citizens will incur when the public health care system expands. The estimation results show that, greater income inequality and population aging are associated with a smaller share of public health expenditure in total health expenditure. The more ideologically left-leaning the electorate is, the larger the share of public health expenditure. Private health insurance tends to erode the political support for the public health care systems in countries with private duplicate health insurance, but not in countries with private primary health insurance. The findings suggest that the role of private sources of funding for health care is likely to grow in developed countries. The expansion of public coverage to include pharmaceuticals and long-term care in some countries may (theoretically) encounter less opposition if the current insurance holders have no duplicate coverage, if the voters as a whole share more left-leaning political ideology, and if low-income voters are more politically mobilized.