Austerity Reduces Public Health Investment

Public health investments help to prevent mortality and reduce health care costs. Yet very few studies have examined the determinants of preventive care investments across countries and over time. We develop a theory of health spending priorities contrasting preventive and curative care. Preventive care is unlikely to be prioritized by governments since it is a public good that requires the allocation of scarce resources in the present to generate diffuse benefits that unfold only in the long-term. As such, public health is a “quiet” policy that is not supported strongly by interest groups or public opinion. These characteristics have two implications: like other long-term investments, public health programs are particularly vulnerable to fiscal austerity, and prevention expenditures are not influenced by government partisanship since parties cannot attract votes with such low visibility, long term investments. We use a dataset covering 25 OECD countries from 1970 to 2018 to demonstrate that fiscal consolidations are negatively associated with the absolute level of preventive care and with its proportion relative to curative care. We also confirm that left governments are not more likely to invest in public health than right-wing governments. Finally, contributing to the literature on comparative health care analysis, we show that National Health Services systems maintain higher preventive care investments than Social Health Insurance systems.

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