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Improvements in medical treatment have contributed to rising health spending. Yet there is relatively little evidence on whether the spending increase is "worth it" in the sense of producing better health outcomes of commensurate value-a critical question for understanding productivity in the health sector and, as that sector grows, for deriving an accurate quality-adjusted price index for an entire economy. We analyze individual-level panel data on medical spending and health outcomes for 123,548 patients with type 2 diabetes in four health systems: Japan, The Netherlands, Hong Kong and Taiwan. Using a "cost-of-living" method that measures value based on improved survival, we find a positive net value of diabetes care: the value of improved survival outweighs the added costs of care in each of the four health systems. This finding is robust to accounting for selective survival, end-of-life spending, and a range of values for a life-year or fraction of benefits attributable to medical care. Since the estimates do not include the value from improved quality of life, they are conservative. We, therefore, conclude that the increase in medical spending for management of diabetes is offset by an increase in quality.

This paper analyses whether government ideology and other political- and electoral-related factors influence country-level public healthcare expenditures, focussing on the impact of the Great Recession on that relationship. We test this hypothesis for the OECD countries in 1970-2016. Our results reveal the presence of a partisan effect, left-wing governments being more likely to raise public expenditures in the health sector. We also find that coalitions increase these expenditures, whilst minority governments and those with a high presence in the lower house decrease them. Meanwhile, the opportunistic behaviour of incumbents related to the timing of elections is not supported by our results. The percentage of public expenditures over total health expenditures is also examined, obtaining similar results regarding the partisan effect. However, the onset of the Great Recession has altered these relationships, neutralizing the impact of political factors.