Government, society and individual effects on health care expenditure

Based on the demand function, this paper analyzes the relationship among the government, society and individual health expenditures and the income of the government, society and individual, using the co-integration theory. It is found that there exists unique long-run relationship among the government, society and individual health expenditures and the income of the government, society and individual in the model over the sample period. It is also found that health care is a kind of necessity to the government and society. Income elasticity of demand of government is near to 1 and larger than the societies'. Health care is a kind of luxury to the individual. The result shows that we can not conclude that disburse of government in health care decreases during the period. It is rational of the decrease of the scale of society health care expenditure to the total health care expenditure and the increase of the scale of the individual health care expenditure to the total health care expenditure.