# Impact of digital economy on residents’ medical cost: an empirical analysis based on interprovincial data from China

## TL;DR

This study shows that a strong digital economy lowers local medical costs but raises them in neighboring areas, with effects varying by region and age structure.

## Contribution

The novel contribution is identifying how the digital economy's impact on medical costs varies regionally and is mediated by factors like age structure and CPI.

## Key findings

- A well-developed digital economy significantly reduces local healthcare expenditure.
- The impact of the digital economy on medical costs varies across regions and is influenced by regional age structure.
- The Consumer Price Index (CPI) masks the direct impact of the digital economy on healthcare expenditure.

## Abstract

This study aims to investigate the impact of the digital economy on residents’ medical expenditure, and the underlying causes.

Utilizing panel data from 30 provinces in China spanning 2017 to 2021, we employed time-fixed effects models, mediation models, and panel threshold models to analyze the influence of the digital economy on residents’ medical expenditure.

Research findings showed that the well-developed digital economy in a certain region significantly reduces local healthcare expenditure, while substantially increased it for the neighboring regions. This impact varied across different areas and is influenced by the regional age structure. The Consumer Price Index (CPI) exhibited a masking effect that weakened the direct impact of digital economy level on healthcare expenditure.

It is recommended to accelerate information technology infrastructure construction, enhance coordination among healthcare, pharmaceutical, and medical insurance policies, and promote technological innovation and product development that better suit the older adults.