Is health financing converging in the European Union? Nonlinear dynamics and policy implications for non-euro area member states.

Background: Convergence in health expenditure across European Union (EU) member states is central to health system equity, fiscal sustainability, and regional cohesion. However, whether countries operating outside the euro area are moving toward similar levels of per capita health spending remains unclear, particularly in the presence of economic shocks and institutional heterogeneity. Methods: This study investigates stochastic convergence in per capita health expenditure among seven EU member states outside the euro area over the period 2000-2022. Using nonlinear and structural-break-sensitive time-series approaches, we assess whether deviations from the group average are temporary or persistent, allowing for asymmetric adjustment and regime shifts. Results: The findings indicate that health expenditure convergence is neither linear nor uniform across countries. While more fiscally mature and institutionally stable systems exhibit evidence of nonlinear long-run adjustment, several countries display persistent divergence from the group mean. At the panel level, results suggest gradual and cyclical convergence rather than steady alignment. Adjustment dynamics appear sensitive to macroeconomic crises and policy environments, highlighting asymmetric responses during expansionary and contractionary periods. Conclusion: Health expenditure convergence among EU countries outside the euro area is best understood as a nonlinear and context-dependent process. Persistent divergence in some countries may pose risks for health system equity and resilience, particularly during economic downturns. These findings underscore the importance of adaptive and counter-cyclical health financing strategies at both national and EU levels to promote sustainable convergence and reduce structural disparities in health system capacity.