ABSTRACT
This chapter analyses a number of underlying factors that contribute to the objective of cost containment within European Union (EU) Member States from a macroeconomic perspective. It investigates the extent to which economic, organizational, technological, demographic and lifestyle factors play a role in explaining levels of spending on health in individual Member States. The chapter provides the theoretical arguments for the treatment of health care systems and the determinants of health care expenditures on an individual and intertemporal basis. It highlights the limitations of the empirical literature in explaining the intertemporal variation in health care expenditures and suggested a number of alternatives which were subsequently tested in each of the 14 EU Member States for a 35-year period. A common feature throughout the health sectors of the industrialized world is the increased use of new medical technology and its rising cost. The macroeconomy exerts considerable pressure on the level and the rate of growth of health care expenditures.
