Public Health Expenditures, Income and Health Outcomes in the Philippines

Deluna, Roperto Jr and Peralta, Tiffany Faith (2014): Public Health Expenditures, Income and Health Outcomes in the Philippines. Forthcoming in:

Abstract

This paper studied the relationship among public health expenditures, income and health outcomes in the Philippines. Infant mortality rate, under five mortality rate and life expectancy were used as proxy for health outcomes. Specifically, this paper presented the profile of government health expenditures, income and health outcomes from 1981 to 2010. The study used Vector Autoregressive Analysis and Granger Causality test to determine the direction of relationship of the variables.

Results revealed that health expenditure per capita followed an overall increasing trend with an average growth rate of 6.49% and GDP per capita with an average growth rate of 11% from 1981 to 2010. These correspond to the reduction of infant mortality rate by 1.64% on average, under five mortality by 1.76% and the increase in life expectancy with an average growth of 0.17% from 1981 to 2010. However, VAR results revealed that the past values of public health expenditure has no effect on under-five mortality rates but affects infant mortality rate. This may suggest that the past and present level of health expenditure is not sufficient enough to affect under five mortality rate but is effective enough on alleviating infant mortality rate. Conversely, past and present values of GDP per capita is not sufficient enough to affect infant mortality rate but affects under five mortality rate in the Philippines. VAR estimation also revealed that both health expenditure and GDP per capita has a positive and significant effect on life expectancy. Thus, to improve life expectancy and to reduce child mortality rates in line with the Millennium Development Goals, it requires effective and sufficient health expenditure and a sustainable economic growth.

• Item Type: MPRA Paper
• Language: English
• Keywords: VAR, Health Outcomes, Health Expenditures, Income, MDG
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models; H - Public Economics > H5 - National Government Expenditures and Related Policies; H - Public Economics > H5 - National Government Expenditures and Related Policies > H51 - Government Expenditures and Health; I - Health, Education, and Welfare > I1 - Health > I15 - Health and Economic Development

References

Anyanwu, J. and A. E. Erhijakpor (2007). Health Expenditures and Health Outcomes in Africa. Delta State University Economic Research Working Paper No. 91.

Bloom, D., D. Canning, J. Sevilla (2004). The Effect of Health on Economic Growth: A Production Function Approach. Harvard School of Public Health, Boston, MA, USA. World Development Vol. 32, No. 1, pp. 1–13, 2004.

Bokhari, F., Y. Gai, P. Gottret (2006). Government Health Expenditures and Health Outcomes. Department of Economics, Florida State University.

Berkman, N., S Sheridan, K. Donahue, D. Halpern, K. Crotty (2011). Low health literacy and health outcomes: an updated systematic review. Research Triangle Park, North Carolina 27709-2194, USA. [e-mail]

Bryant, J. (2004). Population Ageing and Government Health Expenditures in New Zealand, 1951-2051

Cabral, E. (2010). Statement at 43rd Session of the Commission on Population and Development.

Day, K. and J. Tousignant (2005). Health Spending, Health Outcomes, and Per Capita Income in Canada: A Dynamic Analysis. Department of Economics, University of Ottawa Working Paper 2005-2007 (June).

Fogel, R. (2009). Forecasting the Costs of US Health Care.

Gardner H. and B. Gardner (2001). Health as Human Capital Theory and Implications. http://connect.msbcollege.edu/bbcswebdav/pid-1637171-dt-content- rid31106_1/library/Graduate/MG565/External%20Link/Week%201%20Theory.pdf

Gani, A. (2008). Health Care Financing and Health Outcomes in Pacific Island Countries. Macmillan Brown Centre for Pacific Studies.

Gwatkin, D.R. (2000). Reducing Health Inequalities in Developing Countries. Oxford Textbook of Public Health fourth edition, 2002

Jones, D and A. Bartlett (2006). Health, Education, Poverty and the Economy.

Kim, T. and S. Lane (2013). Government Health Expenditure and Public Health Outcomes: A Comparative Study among 17 Countries and Implications for US Health Care Reform Vol. 3 No. 9 (September).

Ogungbenle, S., O.R. Olawumi, F. Obasuyi (2011). Life Expectancy,Public Health Spending and Economic Growth in Nigeria. Department of Economics, Ikere Ekiti Vol. 9 No. 19.

Qadri, F.S., and Dr. A. Waheed (2011). “Human Capital and Economic Growth:Time Series Evidence from Pakistan”. MPRA Paper No. 30654.

Solon, O., A. Herrin, R. Racelis. M. Manalo, V. Ganac (1999). Health Care Expenditure Patterns in the Philippines: Analysis of National Health Accounts, 1991-1997 Vol. 36, No. 2.