Challenges in health care financing and provision
Good health is highly valued and a prerequisite for taking full benefit of a rising level of income. Hence, the willingness to pay for improved health is likely to rise sharply with income, and so is the willingness to pay for health care, since health care is a vital input in the production of health. There are a number of trends that influence health care expenditure besides income. On the demand side, there are the demographic changes that are summarized as an ageing population due to higher life expectancy and changing fertility, changes in lifestyle that may lead to obesity and other risk factors, and environmental changes that may influence health. On the supply side, new and often expensive medical technology gives more and better treatment, and increasing female labour force participation has reduced informal care given in the family. Even though the health care needs are changing and new technologies improve human happiness and welfare, the expansion of health care still needs to be financed. The characteristics of the markets for health insurance and health care make the expansion of health care challenging.
Iversen, Tor og Sverre A.C. Kittelsen