Households Health Expenditure in Interannual Correlation With Public Health Expenditure in Greece

The aim of this article is to investigate the relationship between the public and the private health expenditure (macroeconomic and microeconomic approach) over time and within the recession and austerity period in Greece, in order to find out whether the strict Memorandum health policies pass, influence, or go along with the health expenditure to the final consumer, i.e., the health services user. In this context, by using econometric tools, such as multiple regression and cointegration analysis on the raw microdata of Household Budget Surveys from 1987/88 up to 2018, as well as by using data of public expenditure of Organization for Economic Co-operation and Development-Health Statistics 2019 in the Stata version 13, the study compares the variation of household and public health expenditures before and after the financial crisis in Greece and also examines the correlation between the two variables. The analysis demonstrated that the Greek household health expenditure (HHE) was rapidly increasing during the period 1988-2008, and afterward, it started decreasing. Moreover, the total private and the total public health expenditures seem to have a bidirectional long-run relationship and significant cointegration. The same was observed regarding the public expenditure and household medical services expenditure, as well as pharmaceuticals. Furthermore, the results indicate that over the years of recession, the monthly HHE decreases, due to the confiscation of middle-class income, which led to consumerism restrictions. However, as households are now spending a bigger portion of their shrunken income for health (as health is an inelastic commodity), HHE, as a proportion of total private expenditure, has eventually risen.