Health-care in Europe as a driving force for output and GDP

Economic analysis of the European health-care systems provides relevant comparative information on the socio-economic variables involved in the determination of the health-care expenditure and its allocation between public and private shares. Many European governments reviewed the existing health-care system and progressively changed their approach to the subject with special reference to both financing and delivering these services. Through the introduction of private providers, many national health-care systems turned into a mixed organization where the production and the financing processes are often run independently. The specific experiences in each country induced the researchers to discuss the economic implications of each health-care reform in a comparative way. In this respect the literature is characterized by an approach, highly empirical, that relies deeply on econometric analysis of socio-demographic variables of health demand. While empirically well-based, the debate suffers from the lack of analysis of the relevance of the production side in the health services output. This paper proposes an approach to look into the relation between health-care services and the whole economic system, based on the quantification of the impact of the "health output" on total output and income. Applying the Macro Multiplier approach on multi-industry model of the whole economy, we compare the economic impact of the production of health-care services of different types of health-care systems, observed in the European countries. This analysis detects and quantifies the different "driving force" of the Health care services in determining the total output in several economic systems. In particular, we focus on the role played by the "health industry" when it activates total output and income through interdependencies within the production processes of the economy. The comparative analysis is performed among four European countries which make up the 58% of the European value added: Germany, France, Italy and Spain.