Ramification of healthcare expenditure on morbidity rates and life expectancy in the association of southeast asian nations countries: A dynamic panel threshold analysis

Objective This study has investigated the impact of healthcare expenditure on life expectancy and morbidity rates in the Association of Southeast Asian Nations to analyse whether health expenditure remains a critical component of improving health status and to determine the threshold value at which health strategy becomes cost‐effective from 2000 to 2019. Methods The techniques employed include the Dynamic Panel Threshold model advanced by Seo et al. (2019) to implement Seo and Shin's (2016) proposed first‐differenced generalised method of moments (GMM) estimation. Furthermore, the dynamic system GMM and Pooled Ordinary Least Squares (OLS) techniques were also employed for robustness check. Results The findings revealed that healthcare expenditure raises life expectancy and lowers the crude death rate, infant mortality rate, and maternal mortality rate. Therefore, healthcare expenditure is increasing life expectancy and reducing crude death rate, infant mortality rate, and maternal mortality rate. However, when disaggregating the impact, that of public healthcare expenditure is higher than that of private except in the case of infant mortality rate where that of private is higher. In addition, it found that the threshold value at which health strategy becomes cost‐effective, thus the amount which the countries should spend for health status improvement is at least 6% and above of their Gross Domestic Product (GDP). Conclusion Healthcare expenditure is raising life expectancy and lowering the morbidity rate of the countries. Furthermore, the cost‐effective level of the country's healthcare expenditure as a proportion of GDP is 6% and above.