Determinants Of Healthcare Expenditure And Healthcare Efficiency: Evidence From Selected Emerging Economies

Matters about health is a topic that touches everyone’s heart.Due to this,the healthcare system has become one of the fundamental pillars of emerging economies.The World Health Organization(WHO)adopted a resolution of universal health coverage(UHC)to ensure that its member countries can access health services and not suffer from financial hardship in receiving health care.Issues about health care expenditure recently dominate political discussions and ranks as the main worry of Emerging nations.Even though there is comprehensive literature tracking the trend and factors influencing public health spending in high-income countries,precisely nations among the Organization for Economic Co-operation and Development(OECD),studies focusing on the drivers of health spending in Emerging nations are relatively limited.In the absence of comprehensive health financing estimates,policymakers and planners cannot clearly measure funding sources and expected future spending.The study provides an empirical analysis of the determinants of healthcare expenditure and healthcare efficiency within the selected emerging economies.To achieve this goal,the study set five objectives;the first objective investigates the role of macroeconomic indicators on healthcare costs among the selected emerging countries.The second objective explores the influence of industrialization and agricultural activities on health care expenditure within the emerging nations.The study again examines the role of governance on public healthcare expenditure and health outcomes.The fourth objective assessed healthcare cost efficiency in the selected emerging economies and the fifth objective investigates the determinants of factors influencing healthcare spending efficiency in the selected emerging nations.To achieve the objectives mentioned above,the study conducted a preliminary test by employing econometrics techniques such as cross-section dependence(CD)test,cross-section IPS(CIPS)panel unit root test,cross-section ADF(CADF)panel unit root test,Pedroni cointegration,and Westerlund cointegration tests.After establishing that the variables are stationary,the study employed panel fully modified ordinary least square(PFMOLS),the generalized method of moments(GMM),fixed-effect model,and Tobit regression to estimate the long-run relationship among the variables to help achieve the set objectives.The Data Envelope Analysis supper SBM model was employed to computes health efficiency scores.The results of the first objective based on the Generalized Methods of Moments estimation showed that taxation and labor force increase public health care expenditure while inflation increases public health costs.Moreover,the study confirmed a u-shaped linkage between economic growth and public health cost.Based on the findings of objective two the quantile regression indicated that agricultural activities and technological advancement could result in an upsurge of public health expenditure.Economic growth and the aging population(with ages 65 years and above)induces health costs in the emerging countries.However,the impact of industrialization showed a declining relationship with healthcare expenditure at the various quantile levels.The FMOLS and the fixed effect model results for objective three showed that corruption negatively influences the mortality rate at all the four-panel levels.Also,an increase in public health care expenditure in emerging economies could reduce under-five mortality and adult mortality in the main panel,lower,middle-and high-income countries.The objective four and five results derived from the Data Envelope Analysis supper SBM and the Tobit model showed some lower-income countries utilizing their resources efficiently,while other upper-income countries were health inefficient.The Tobit results suggested that an increase in Physicians enhance health efficiency in the main panel,lower-middle,and highincome economies.Education promotes health efficiency in the main panel,upper middle income,and high-income countries.It was observed that countries with high literacy rates largely have an averagely high life expectancy.The study again reveals that corruption reduces health efficiency in emerging economies.Corruption negatively influences public policies for health care by hindering physicians and health workers from providing services to the optimal level.To improve public health spending,increasing the fiscal capacity of Emerging countries by widening the tax base through the extension of the collection of the domestic tax revenue is essential.Increasing taxes on unhealthy products to serve as a double-edged sword to deter consumers from consuming unhealthy diets can maintain the populations’ health while governments at the same time earn funds to save lives and enhance the general well-being of the public.Governments should also implement strict policies to ensure the wise utilization of revenue collected from taxes.This will contribute to resource availability for health care and an improved access to quality health services.Inflation may increase public healthcare costs among the Emerging economies.Given this,governments can engage in the implementation of monetary policies to control inflation by reducing imported goods and enhancing the patronage of locally manufactured products.The innovation of the study is as follows: theoretically,the study extends frontiers of previous empirical studies by exploring essential macro-economic variables such as tax revenue,inflation,and foreign direct investments on healthcare expenses.Other studies have considered the macroeconomic variables;however,in the emerging economies,these studies are limited.The study,therefore,attempts to fill this current gap in the literature.Moreover,the study introduces the non-linear relationship between healthcare expenditure and economic growth among the Emerging nations by modifying the Health Kuznets Cointegration tests check for the presence of a long-term correlation between variables,which is given little attention in the literature.As questions and concerns about the role of economic activities on government expenditure grow louder.The effect of industrialization and agricultural activities on public health spending in Emerging nations become increasingly vital.Against this background,it is innovative to complement the existing literature by examining the impact of industrialization and agricultural activities on total health expenditure in Emerging countries.Third,literature regarding the efficiency of health expenses at the macro level in Emerging economies is still at the elementary stage.Conclusions drawn from the existing literature at micro levels such as in nursing homes and hospitals may not be reflecting the true picture of health efficiency at the macro level.Therefore,this study takes up the challenge to investigate the efficiency of health expenses in the emerging nations by grouping the countries under income levels.For major policy implications,this situation requires a comprehensive analysis of how proficient resources are utilized for health care services in the Emerging economies based on their income levels.Fourth,the study examines the role of corruption on healthcare expenditure and health outcomes within the Emerging nations.Previous scholars failed to include corruption in health outcome studies in developing countries.This has the potential to result in bias findings obtained from such studies.Hence,including corruption in health outcome studies,thus represent a vital innovation in this study which will provide essential policy implications in the health sector for these countries.Again,this will be contributing immensely in filling the current literature gap on the subject matter whilst providing essential information to enrich financial health management analysis and programs.