THE IMPACT OF PHYSICIANS’ DECENTRALIZATION ON HEALTH SERVICES AND ECONOMIC GROWTH

Abstract

This study uses Zon and Muyken’s (2001) model to investigate the effect of physicians’ decentralization on health care production, human capital accumulation, and economic growth. The model includes the health, education, and production sectors, and was calibrated for the Brazilian economy in 2014 with data from National Accounts, the Census and the Brazilian National Health System SUS. The aim was to estimate the impact of the change in the number of physicians per 100,000 inhabitants. We considered four different groups: municipalities with above and below 50,000 inhabitants in the south and southeast of Brazil and similarly for the north and northeast regions of the country. Our results indicate that increasing the number of physicians per 100,000 inhabitants raises the economy's long-term growth rate, improves the average quality of health, and increases the proportion of effective labor in the production of human capital.