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ORIGINAL RESEARCH article
Front. Public Health
Sec. Health Economics
Volume 13 - 2025 | doi: 10.3389/fpubh.2025.1562417
This article is part of the Research Topic Sustainable and Mission-oriented Innovation in Economic Systems and Governance for Equitable Global Health and Wellbeing View all 29 articles
Dynamic Externalities of Basic Medical Insurance Compensation, Health Capital Accumulation, and Economic Growth
Provisionally accepted- 1 Communication University of China, Beijing, Beijing Municipality, China
- 2 Hunan University of Technology and Business, Changsha Shi, Hunan Province, China
A sound healthcare system is strategically significant for alleviating the financial burden on families while simultaneously fostering economic growth. This paper develops a neoclassical economic growth model incorporating dynamic basic medical insurance, and health capital. Utilizing the Shooting algorithm, we compute the equilibrium solutions at each period along the saddle path and analyze the external effects of dynamic basic medical insurance compensation. Our research reveals that the absence of basic medical insurance compensation and a steady-state basic medical insurance compensation can result in a decrease in welfare levels along the saddle path. In comparison, a progressively decreasing dynamic basic medical insurance compensation rate not only promotes the consumption of medical products, thereby yielding a dual benefit of enhancing the stock of health capital and stimulating economic growth, but also realizes the goal of maximizing welfare levels throughout the entire saddle path. Moreover, the implementation of basic medical insurance compensation policy has increased the labor supply along the saddle path and caused a partial shift of labor supply towards the medical products sector. This paper offers effective suggestions for relevant departments to develop policies aimed at improving public health and fostering the growth of the health industry.
Keywords: Basic medical insurance, Health capital accumulation, economic growth, Saddle path, Subsidy
Received: 17 Jan 2025; Accepted: 03 Apr 2025.
Copyright: © 2025 Yuan and Yang. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence:
Xujin Yang, Hunan University of Technology and Business, Changsha Shi, 410013, Hunan Province, China
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