Prices and Quantities in Healthcare – the Consequences of Price Distortions

The Public Health Research Group and the Center for Policy Studies

invite you to a presentation

Prices and Quantities in Healthcare – the Consequences of Price Distortions

Peter Mihalyi
CEU Department of Economics

Analysing the utilization side of the GDP of different countries, meaningful comparisons can be made on expenditures devoted to medical care on the one hand, and the expenditures used for damaging the population’s health status (e.g. alcohol, tobacco and narcotics). Such comparisons can be made only after the elimination of the differences in relative price levels among the countries. This lecture is based on the results of the International Comparison Project (ICP), sponsored by the World Bank, the OECD and the EU. Our finding is that Hungary’s net health expenditures, taking into account both the useful (+ 10.7%) and harmful (-4.0%) consumption expenses, are merely 6.7% of GDP. It looks like as if the Hungarian households behaved like a senseless driver pushing simultaneously the break and the accelerator pedals.

The underlying study, the Final Report of the ICP 2011 Purchasing Power Parities and the Real Size of World Economies was published in October 2014. The report includes the full set of detailed results and presents an in-depth analysis of volume and per capita measures for many healthcare-relevant expenditure categories. It provides several indicators including purchasing power parities (PPPs), real expenditures, and price level indices for GDP and its main aggregates for 177 participating economies, and partial results for an additional 22 economies.