Introduction To Data Analysis For Medical Student
Introduction To Data Analysis For Medical Student
Introduction To Data Analysis For Medical Student
With the aid of graphs, explain the relationship between Gross Domestic Product and
Aggregate Health Expenditure using any 4 Countries of your choice. Use Time series or
secondary data spanning from 2000 to 2022 for the analysis.
QUESTION ......................................................................................................................................1
INTRODUCTION ........................................................................................................................... 2
METHODOLOGY ...........................................................................................................................3
CONCLUSION ................................................................................................................................9
REFERENCES ...............................................................................................................................11
INTRODUCTION
The relationship between Gross Domestic Product (GDP) and Aggregate Health
Expenditure (AHE) is a crucial area of study in health economics and policy-making.
Understanding this relationship helps inform decisions regarding resource allocation, health
outcomes, and economic development. For the sake of this assignment, four countries having
different economic and healthcare strength has been selected. These countries are USA, Italy,
Kenya and Nigeria.
GDP is a measure of the economic activity within a country and represents the total
monetary value of all goods and services produced over a specific time period. It is a key
indicator of a country’s economic health and is used to compare the economic performance of
different countries.
Aggregate Health Expenditure represents the total spending on health-related services and
goods in a country. This includes expenditures by households, private and public organizations,
and government agencies on healthcare services, medical research, and health-related
infrastructure. The World Health Organization (WHO) categorizes Aggregate Health Expenditure
(AHE) into various components to provide a detailed understanding of how health resources are
allocated and utilized within a country. These categories include Current Health Expenditure,
Health Capital Expenditure, External Health Expenditure, Domestic Private Health Expenditure,
and Domestic General Government Health Expenditure. Each of these categories plays a vital
role in the overall healthcare financing and system efficiency.
1. Current Health Expenditure (CHE): Current Health Expenditure refers to the total spending on
healthcare goods and services consumed within a specific time period. This includes expenditures
on prevention, curative care, rehabilitation, and administration of health services. CHE is
essential for maintaining the day-to-day operations of health systems and ensuring the delivery of
immediate health services.
2. Health Capital Expenditure (HCE) Health Capital Expenditure represents investments in fixed
assets such as hospitals, medical equipment, and other health infrastructure. This category of
spending is aimed at enhancing the capacity and efficiency of healthcare systems over the long
term.
3. External Health Expenditure (EHE): External Health Expenditure comprises all health-related
funds received from international sources, including foreign aid, grants, and loans. This external
financing is often crucial for developing countries, where domestic resources may be insufficient
to meet healthcare needs.
4. Domestic Private Health Expenditure (DPHE): Domestic Private Health Expenditure includes
all health spending by private entities within a country. This category covers out-of-pocket
payments by individuals, private health insurance, and expenditures by private sector
organizations.
METHODOLOGY
Aggregate Health Expenditure as a Percentage of GDP is a key metric used to understand the
relationship between a country's health spending and its overall economic performance. This
metric indicates the proportion of a nation's economic output (GDP) that is devoted to healthcare.
It provides a more relative measure of health expenditure compared to raw monetary figures,
making it easier to compare across countries or over time, regardless of differences in economic
size or growth rates.
Aggregate Health Expenditure as % of GDP: This ratio is calculated by dividing the total
Aggregate Health Expenditure by the Gross Domestic Product of the country and multiplying by
100. It shows what fraction of the country's total economic output is spent on healthcare.
By expressing Aggregate Health Expenditure as a percentage of GDP, we gain insight into how
much a country prioritizes health in relation to its overall economic production. A higher
percentage implies a significant commitment to healthcare relative to the country's economic
capacity, while a lower percentage might indicate under investment or more efficient use of
resources.
1. Data Availability: The available data from the WHO is in the form of Aggregate Health
Expenditure as a percentage of GDP rather than raw monetary figures. To maintain credibility
and ensure consistency, it's important to use this data as provided by a reliable and recognized
source like the WHO.
2. Comparative Analysis: Using Aggregate Health Expenditure as a percentage of GDP allows
for better comparisons across different countries, regardless of their economic size. For instance,
a small country with a high percentage may be investing more in healthcare relative to its
economy than a larger country with a lower percentage, even if the absolute spending in dollars is
higher in the larger country.
3. Temporal Comparisons: It also facilitates comparisons over time within the same country. If
a country’s GDP grows but its Aggregate Health Expenditure as a percentage of GDP decreases,
it might suggest that the country is not increasing its health spending at the same rate as its
economic growth.
Italy:
AHE as % of GDP is at 9.63% in 2020, slightly decreases to 9.38% in 2021, and further to 9.00%
in 2022. Italy’s spending pattern follows a similar trend to the United States, with a gradual
decrease over the three years.
Kenya:
AHE as % of GDP increases from 4.48% in 2020 to 4.55% in 2021, then slightly decreases to
4.55% in 2022. Kenya shows a slight increase initially, which might indicate a growing emphasis
on healthcare, but the slight decrease in 2022 could suggest a shift or stabilization in spending.
Nigeria:
AHE as % of GDP shows a gradual increase from 3.38% in 2020 to 4.08% in 2021 and 4.08% in
2022. Nigeria’s increase over the years suggests a growing investment in healthcare relative to its
GDP, albeit starting from a lower base compared to the other countries.
Domestic General Government Health Expenditure (DGGHE)
The graphs above depicts the Domestic General Government Health Expenditure (DGGHE) for
Kenya, Nigeria, the United States, and Italy for the years 2020 and 2021. Here is an interpretation
and analysis of the data:
General Overview
The United States has the highest Domestic General Government Health Expenditure as a
percentage of GDP for both years. This reflects a substantial government investment in health
relative to its economy.
Nigeria consistently has the lowest DGGHE, indicating a lower prioritization of health
expenditure in the government budget relative to its GDP.
There is a general decrease in DGGHE as a percentage of GDP from 2020 to 2021 for all the
countries, except Kenya, which shows a slight increase.
This trend suggests changes in government budget allocations or economic growth patterns.
3. Country-Specific Analysis
United States:
DGGHE decreases from 10.69% in 2020 to 9.62% in 2021. This reduction could be due to a
variety of factors, including changes in health policies, economic conditions, or shifts in other
areas of government spending.
Italy:
DGGHE decreases from 7.31% in 2020 to 7.08% in 2021. The decrease in Italy's DGGHE
indicates a relative reduction in government spending on health, which might be due to budgetary
constraints or other fiscal policies.
Kenya:
DGGHE remains stable, with a slight increase from 2.21% in 2020 to 2.22% in 2021. Kenya’s
stability suggests a consistent approach to government health spending despite potential
economic fluctuations.
Nigeria:
DGGHE increases slightly from 0.51% in 2020 to 0.54% in 2021. Although the increase is
minimal, it could indicate a gradual shift towards prioritizing health expenditure in government
budgets.
The relationship between GDP and AHE is typically analyzed through the lens of economic
theory, which suggests that as a country’s GDP increases, so does its AHE. This is because
economic growth provides more resources for health services and infrastructure, and higher
incomes allow for increased private spending on health. Conversely, high AHE can lead to
improved health outcomes, which in turn can enhance productivity and contribute to GDP growth.
Wagner's Law: This theory posits that as an economy develops, government spending, including
health expenditure, tends to increase disproportionately compared to GDP growth. Research by
Newhouse (1977) found that income elasticity for health spending is greater than one, suggesting
that health spending grows faster than GDP .
Preston Curve: This graphical representation shows a positive relationship between life
expectancy and per capita income (GDP). It indicates that wealthier nations tend to spend more
on health, leading to better health outcomes, which further contributes to economic growth
(Preston, 1975) .
Empirical Studies: Numerous empirical studies have confirmed the positive correlation between
GDP and AHE. For instance, Baltagi and Moscone (2010) used a panel data approach and found
that a 1% increase in GDP leads to a more than 1% increase in health expenditure in OECD
countries .
CONCLUSION
The relationship between GDP and AHE is complex and multifaceted, reflecting the interplay
between economic resources and health outcomes. As economies grow, increased health
expenditures can lead to improved health services and outcomes, which in turn support further
economic growth. Understanding this relationship is vital for policymakers and stakeholders in
prioritizing and managing health spending effectively.
In conclusion, the charts offers insights into how different governments prioritize health spending
relative to their economies, with notable differences in both the levels and trends of spending
among the four countries.
References
1. Barro, R. J., & Sala-i-Martin, X. (2004). Economic Growth (2nd ed.). MIT Press.
2. Samuelson, P. A., & Nordhaus, W. D. (2010). Economics (19th ed.). McGraw-Hill/Irwin.
3. World Health Organization. (2010). The World Health Report: Health Systems Financing:
The Path to Universal Coverage. WHO.
4. Cutler, D. M., & McClellan, M. (2001). Is technological change in medicine worth it?
Health Affairs, 20(5), 11-29.
5. Newhouse, J. P. (1977). Medical-care expenditure: a cross-national survey. Journal of
Human Resources, 12(1), 115-125.
6. Preston, S. H. (1975). The changing relation between mortality and level of economic
development. Population Studies, 29(2), 231-248.
7. Baltagi, B. H., & Moscone, F. (2010). Health care expenditure and income in the OECD
reconsidered: Evidence from panel data. Economic Modelling, 27(4), 804-811.