Cross-state Disparities in the US Health Care Expenditure

This study examines the degree of convergence in health care expenditures among the US states from 1980 to 2004. Our results suggest that the US states form two clubs with specific geographical characteristics that converge to different equilibria. We also extend our analysis to investigate the cross-state disparities in nine major components of health expenditures. Our findings provide evidence for full convergence for only two components, namely 'physician and other professional services' and 'home health care'. However, for the remaining components, we can still identify various convergence clubs.