The Electoral Politics and the Evolution of Complex Healthcare Systems

OECD countries have used a variety of mechanisms for subsidizing healthcare for more than a century. This paper suggests that the complexity of healthcare systems and reform tend to advance rational voter interests. It demonstrates that electoral models can explain why various combinations of healthcare programs have been adopted and why they are modified through time. The analytical and empirical results suggest that income, health risks, ideology, technology, and political institutions systematically affect the composition of national healthcare systems. Expenditures rise with income, technological advance, and leftward shifts in ideology, and fall somewhat with morbidity. The same variables affect composition of expenditures, although not uniformly.