Is health expenditure effective for achieving healthcare goals? Empirical evidence from South-East Asia Region

This study examines the effectiveness of health expenditure on healthcare goals in South-East Asia Region for the period from 2000 to 2014 using system generalized method of moment model. In this study, aggregate health expenditure data have been divided into two components—public and private. Both public and private health expenditure components are segregated into four categories of expenditure—government health expenditure from domestic sources, external assistance of health to the government, private out-of-pocket (i.e., household expenditure), and private not out-of-pocket (i.e., insurance). Certain health status indicators have been adopted as healthcare goals—life expectancy, infant mortality, universal health coverage index; immunization coverage, the prevalence of undernourishment, and Tb cases detection rate. The empirical result finds that aggregate health expenditure, especially public health expenditure, shows positive effects on the improvement in life expectancy and reduction of infant mortality. But the relationship between health expenditure and healthcare goals is weak (i.e., inelastic) and the elasticity values are numerically small than the non-health factors especially female education and per capita income. We have found a strong positive association between health expenditure and universal health coverage index that implies a 1% increase in public health expenditure leads to a 0.26% rise in healthcare services coverage. Further, female education has shown strong effects on the reduction of undernourishment population and increase immunization coverage. Increased public expenditure on health through domestic revenue generation and improved government effectiveness could be suggestive policy implications for achieving better health outcomes.