Clustering of OECD Countries Out of Pocket Health Expenditure Time Series Data

Abstract

Out of pocket health expenditures points out to the payments made by households at the point
they receive health services. Frequently these include doctor consultation fees, purchase of
medication and hospital bills. In this study hierarchical clustering method was used for
classification of 34 countries which are members of OECD (Organization for Economic
Cooperation and Development) in terms of out of pocket health expenditures for the years
between 1995-2011. Longest common subsequences (LCS), correlation coefficient and
Euclidean distance measure was used as a measure of similarity and distance in hierarchical
clustering. At the end of the analysis it was found that LCS and Euclidean distance measures
were the best for determining clusters. Furthermore, study results led to understand grouping
of OECD countries according to health expenditures.