Austerity, health care provision, and health outcomes in Spain

from Health Economics at on June 18, 2017 at 04:46PM

The recession that started in the United States in December 2007 has had a significant impact on the Spanish economy through a large increase in the unemployment rate and a long recession which led to tough austerity measures imposed on public finances. Taking advantage of this quasi-natural experiment, we use data from the Spanish Ministry of Health from 1997 to 2014 to provide novel causal evidence on the short-term impact of health care provision on health outcomes. The fact that regional governments have discretionary powers in deciding health care budgets and that austerity measures have not been implemented uniformly across Spain helps isolate the impact of these policy changes on health indicators of the Spanish population. Using Ruhm’s (2000) fixed effects model, we find that staff or hospital bed reductions account for a significant increase in mortality rates from cardiovascular disease and external causes, for 25-34 and 65-74 year-old groups, and in the late foetal mortality rate. Mortality rates, however, do not seem to be robustly affected by the 2012 changes in retirees’ pharmaceutical co-payments. Contrary to expectations, we find some evidence of reduced mortality rates for cancer and female cancer as a result of the 2012 changes in migrants’ access restrictions to the Spanish NHS. Overall, our analyses suggest that short-term impacts of decreases in health care provision on mortality are significant but small. However, impacts prove to be economically and quantitatively significant in the case of fatalities due to external causes, especially accidental deaths.