Does the Great Recession Contribute to the Convergence of Health Care Expenditures in the US States?

Abstract

This paper examines whether the Great Recession has altered the disparities of the US regional health care expenditures. We test the null hypothesis of convergence for the US real per capita health expenditure for the period 1980–2014. Our results indicate that the null hypothesis of convergence is clearly rejected for the total sample as well as for the pre-Great Recession period. Thus, no changes are found in this regard. However, we find that the Great Recession has modified the composition of the estimated convergence clubs, offering a much more concentrated picture in 2014 than in 2008, with most of the states included in a big club, and only 5 (Nevada, Utah, Arizona, Colorado and Georgia) exhibiting a different pattern of behavior. These two estimated clubs diverge and, consequently, the disparities in the regional health sector have increased.