4.3.3. Scenarios on income effects
An important factor driving demand for and expenditure on health care is national
income. While the correlation between income and demand at the individual level is
affected by universal coverage of health insurance often providing incentives for
excessive use of some services, the correlation is much more visible at the aggregate
level. Several studies tend to suggest that health care spending rises broadly in line with
economic growth. The responsiveness of health care spending to the national income,
and therefore projected growth in health care spending due to future evolution of
macroeconomic variables depends to a large extent on the income elasticity of demand
for health care. As proven by empirical data, ‘health care is an individual necessity and a
national luxury’ and in aggregate terms it is likely to have high, exceeding unity, income
elasticity.