Beyond the Buzz: Electric cars and the German health public budget

Introduction

This study explores the impact of electric cars on public health expenditures by considering several scenarios and using the Generalized Structural Equation Model (GSEM) estimator.

Methods

The analysis utilizes a dataset covering 16 Federal States of Germany from 2008 to 2021.

Setting and population

The dataset includes data on electric car adoption, public health expenditures, road infrastructure, and socio-economic and demographic indicators.

Results

The main findings suggest that the relationship between electric cars and public health expenditures in Germany is complex, shaped by various socio-economic factors. The positive impact of electric cars on public health expenditures is mainly driven by traffic collisions from state roads that require more hospital units, including additional beds. In contrast, traffic collisions from county roads show a stronger negative correlation with hospital bed demand, indicating less pressure on the public health budget due to a reduced need for new hospital units.

Conclusions

In summary, the electric cars may increase traffic collisions in Germany, particularly on state and county roads. In this context, traffic collisions on state roads appear to result in greater demand for new hospitals with additional beds and potentially rising healthcare costs, especially considering the severity of accidents on these roads. However, traffic collisions from county roads show a negative correlation with hospital beds, being higher in amplitude than those on state roads. This indicates that local traffic characteristics, the improved safety of electric cars, and efficiencies in healthcare (e.g., outpatient care) contribute to a reduction in the need for hospitalisation and help mitigate the financial impact. Additionally, healthcare spending is influenced by factors such as unemployment, GDP growth, an ageing population, and the number of doctors. However, the healthcare system's capacity to efficiently manage hospital resources and transition to outpatient care could mitigate the financial strain caused by traffic incidents related to electric cars.