Healthcare Expenditure and Economic Performance: Insights From the United States Data

Abstract

This research explores the association of public health expenditure with economic performance across the United States. Healthcare expenditure can result in better provision of health opportunities, which can strengthen human capital and improve the productivity, thereby contributing to economic performance. It is therefore important to assess the phenomenon of healthcare spending in a country. Using visual analytics, we collected economic and health data from the Bureau of Economic Analysis and the Bureau of Labor Statistics for the years 2003-2014. The overall results strongly suggest a positive correlation between healthcare expenditure and the economic indicators of income, GDP, and labor productivity. While healthcare expenditure is negatively associated with multi-factor productivity, it is positively associated with the indicators of labor productivity, personal spending, and GDP. The study shows that an increase in healthcare expenditure has a positive relationship with economic performance. There are also variations across states that justify further research. Building on this and prior research, policy implications include that the good health of citizens indeed results in overall better economy. Therefore, investing carefully in various healthcare aspects would boost income, GDP, and productivity, and alleviate poverty. In light of these potential benefits, universal access to healthcare is something that warrants further research. Also, research can be done in countries with single-payer systems to see if a link to productivity exists there. The results support arguments against our current healthcare system's structure in a limited way.

Keywords: GDP; economic performance; healthcare; hospital expenditure; personal healthcare expenditure; visual analytics.