Switzerland (7.2 million inhabitants) is a federal state composed of 26 cantons. The autonomy of cantons and a particular health insurance system create strong heterogeneity in terms of regulation and organisation of health care services. In this study we use a single-equation approach to model the per capita cantonal expenditures on health care services and postulate that per capita health expenditures depend on some economic, demographic and structural factors. The empirical analysis demonstrates that a larger share of old people tends to increase health costs and that physicians paid on a fee-for-service basis swell expenditures, thus highlighting a possible phenomenon of supply-induced demand. Copyright © 2005 John Wiley & Sons, Ltd.

Background: The sustainability of long-term care (LTC) is a prominent policy priority in many Western countries. LTC is one of the most pressing fiscal issues for the growing population of elderly people in the European Union (EU) Member States. Country recommendations regarding LTC are prominent under the EU’s European Semester. Methods: This paper examines challenges related to the financial- and organizational sustainability of LTC systems in the EU. We combined a targeted literature review and a descriptive selected country analysis of: (1) public- and private funding; (2) informal care and externalities; and (3) the possible role of technology in increasing productivity. Countries were selected via purposive sampling to establish a cohort of country cases covering the spectrum of differences in LTC systems: public spending, private funding, informal care use, informal care support, and cash benefits. Results: The aging of the population, the increasing gap between availability of informal care and demand for LTC, substantial market failures of private funding for LTC, and fiscal imbalances in some countries, have led to structural reforms and enduring pressures for LTC policy-makers across the EU. Our exploration of national policies illustrates different solutions that attempt to promote fairness while stimulating efficient delivery of services. Important steps must be taken to address the sustainability of LTC. First, countries should look deeper into the possibilities of complementing public- and private funding, as well as at addressing market failures of private funding. Second, informal care externalities with spill-over into neighboring policy areas, the labor force, and formal LTC workers, should be properly addressed. Thirdly, innovations in LTC services should be stimulated to increase productivity through technology and process innovations, and to reduce costs. Conclusion: The analysis shows why it is difficult for EU Member State governments to meet all their goals for sustainable LTC, given the demographic- and fiscal circumstances, and the complexities of LTC systems. It also shows the usefulness to learn from policy design and implementation of LTC policy in other countries, within and outside the EU. Researchers can contribute by studying conditions, under which the strategies explored might deliver solutions for policy-makers.

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Territorial decentralization involves the transfer of responsibilities from a central government to lower levels of government. A common trend in different developed countries has been to decentralize some health functions (managerial and/or financial) to local governments. The set-up of the health care system and its degree of decentralization are here utilized in a panel data analysis as a determinant of health care expenditure in a sample of 20 Organization for Economic Co-operation and Development (OECD) countries for the period 1990 to 2000. These findings lend support that demographic, supply-related and socio-economic factors impact on overall health care costs and a decentralized health care setting implies higher health expenditure.

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The point of departure of our analysis is the seminal work of Rodgers (1979) on the absolute and relative income hypotheses. We find that substituting the governance index for the Gini index is statistically the preferred regression model. Our findings lend support to the argument that governance matters. Further investigation provides evidence for two types of threshold effects: in terms of both absolute income and governance. For those countries below a threshold, absolute income is the most significant determinant of health, while for those above it, governance matters the most. The regression analyses are conducted on a sample of 112 states, which is representative of a wide range of absolute income and governance levels

We study medical practice variations for nine hospital treatments in the Netherlands. Our panel data estimations include various control factors and physician’s role to explain hospital treatments in about 3,000 Dutch zip code regions over the period 2006–2009. In particular, we exploit the physicians’ remuneration difference—fee-for-service (FFS) versus salary—to explain the effect of financial incentives on medical production. We find that utilization rates are higher in geographical areas where more patients are treated by physicians that are paid FFS. This effect is strong for supply sensitive treatments, such as cataracts and tonsillectomies, while we do not find an effect for non-supply sensitive treatments, such as hip fractures.

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