The health care sector in the economies of the European Union: an overview using an input-output framework

Abstract

Background: This study aims to analyse the relative importance of the health care sector (health care activities and services), its interrelations with the rest of productive activities, aggregate supply and demand, employment requirements and apparent labour productivity in the European Union (EU) economy as a whole, and in the economies of member countries.

Methods: The methodology used is based on input-output analysis. Data are extracted from National Accounts and, specifically, from the input-output framework for 2010. Data in national currencies are adjusted using as a conversion factor, specific purchasing power parities for health.

Results: In the EU, market production predominates in the provision of health care activities, which are financed mainly by public funding. However, there is significant variability among countries, and, in fact, non-market production predominates in most EU countries. The health care sector has direct backward and forward linkages lower than the average for all sectors of the economy and the average for the services sector. Thus, this sector is relatively independent of the rest of the productive structure in the EU. The health care activities industry is key because of its ability to generate value added and employment. Regarding apparent labour productivity, there are significant differences among EU countries, showing that productivity is positively related to the weight of market production in health care activities and negatively related to the number of hours worked per person employed.

Conclusions: Our results provide useful insights for health authorities in the EU, as they analyse the effect of health policies on macroeconomic indicators using an input-output framework, as well as comparing these effects with those in EU member countries. To the best of our knowledge, an analysis of the health care sector in the EU economy and the countries that integrate it using an input-output framework has not been undertaken. In addition, to compare health care expenditure between countries, data in national currencies have been adjusted using specific purchasing power parities for "health", and not ones referring to the total economy (GDP), which is common practice in many previous studies.

Keywords: Apparent labour productivity; European Union; Health care sector; Input–output analysis; Supply and demand.

Fig. 1

Health Care Activities. Direct backward linkages (%) (domestic at basic prices). 2010. Source: Prepared by authors with Eurostat data, "Use table at basic prices (domestic)"

Fig. 2

Health care services. Direct forward linkages (%) (basic prices, domestic). 2010. Source: Prepared by authors with Eurostat data, "Use table at basic prices (domestic)"/“Symmetric input–output table at basic prices (product by product) (domestic)"

Fig. 3

GVA requirements. 2010. Source: Prepared by authors with Eurostat data, "Use table at basic prices (domestic)"/"Supply table at basic prices"

Fig. 4

Requirements of hours worked (employment). 2010. Source: Prepared by authors with Eurostat data, "Use table at basic prices (domestic)"/"Supply table at basic prices"/"National Accounts employment data by industry"

Fig. 5

Health care activities. Types of output (% of total output). 2010. Source: Prepared by authors with Eurostat data, "Supply table at basic prices"

Fig. 6

Health care services. Types of uses (% of total uses). 2010. Note: The “other uses” component includes all possible alternatives for the output of health care services, including intermediate outputs and other final uses (NPISH final consumption expenditure, gross capital formation (GCF) and exports). This use of GCF should not be interpreted as the investment expenditure made by health care services. The construction of the different input–output tables that are analysed only allows us to determine what the investment expenditure is by the set of industries of the economy, but not the expenditure carried out by each of the industries individually. Source: Prepared by authors with Eurostat data, "Use table at basic prices (domestic)"/“Symmetric input–output table at basic prices (product by product) (domestic)"

Fig. 7

Total Final Consumption Expenditure (GG and Households) per capita on health care services (in PPS_EU28) (Households actual final consumption approach). 2010. Source: Prepared by authors with Eurostat data "Use table at purchasers' prices (domestic and imports)"/"Purchasing power parities (PPPs)"/"Euro/ECU exchange rates—annual data"/"Population on 1 January by age and sex"

Fig. 8

Comparison of Price level indices (PLI) for GDP and Health (Index EU28 = 100). 2010. Source: Prepared by authors with Eurostat data, "Purchasing power parities (PPPs)"/"Euro/ECU exchange rates—annual data"

Fig. 9

Comparison of Total Final consumption expenditure (GG and Households) per capita on health care services (in PPS_EU28), using PPPs for GDP and for Health (Households actual final consumption approach). Source: Prepared by authors with Eurostat data, "Use table at purchasers' prices (domestic and imports)"/"Purchasing power parities (PPPs)"/"Euro/ECU exchange rates—annual data"/"Population on 1 January by age and sex"

Fig. 10

Health care activities. Apparent labour productivity (ALP) (in PPS_EU28 per hours worked) (Index EU28 = 100). 2010. Source: Prepared by authors with Eurostat data, "Supply table at basic prices"/"Use table at basic prices (domestic)”/“National Accounts employment data by industry”/"Purchasing power parities (PPPs)"/"Euro/ECU exchange rates—annual data"

Fig. 11

Health care activities. Relation between apparent labour productivity (in PPS_EU28; Index EU28 = 100) and the share of market output (% of total output). 2010. Source: Prepared by authors with Eurostat data, "Supply table at basic prices"/"Use table at basic prices (domestic)”/“National Accounts employment data by industry”/"Purchasing power parities (PPPs)"/"Euro/ECU exchange rates—annual data"

Fig. 12

Health care activities. Relation between apparent labour productivity (in PPS_EU28; Index EU28 = 100) and hours worked per person employed (Index EU28 = 100). 2010. Source: Prepared by authors with Eurostat data "Supply table at basic prices"/"Use table at basic prices (domestic)”/“National Accounts employment data by industry”/"Purchasing power parities (PPPs)"/"Euro/ECU exchange rates—annual data"