Convergence in Per Capita Health Expenditures and Health Outcomes in the OECD Countries

Our analysis of 19 OECD countries over the period 1972-2006 provides evidence of convergence in per capita health care expenditures for 17 countries, while the US and (to a lesser degree) Norway follow a different path. A simple decomposition of per capita health expenditures reveals that the divergence of the US comes from the divergence of the ‘health care expenditure over GDP’ component, while Norway’s divergence is mainly caused by the ‘labour productivity’ component. Interestingly, our results suggest that convergence in per capita health expenditures among the 17 OECD countries does not lead to convergence in health outcomes. Finally, we extend our analysis to examine convergence in various determinants of health expenditures. JEL Classification: C23; I10.