Public Health Expenditure and Health Outcomes in Nigeria in the Year 2022; Case Study of Calabar South Cross River State
Chapter One
Objective of the study
The objective of the study is to analyze the effect of health care expenditure on health outcomes in Cross Rivers state, using panel regression analysis. We will also disaggregate the expenditure into public and private and see how these expenditures affect the health outcomes using annual data from 2010 to 2020.
- To examine government’s expenditure on the sector from 2010 to 2020.
- To establish the exact relationship between Government expenditure and health indicators in Nigeria.
- To determine the extent to which healthcare expenditures by government in Nigeria can be considered as efficient.
- To establish if the percentage of healthcare expenditure to other sectors in the Nigerian Government Budgets are sufficient.
- To recommend (if need be) the percentage of healthcare spending in Future budgets so as to achieve the desired level of health performances.
CHAPTER TWO
LITERATURE REVIEW
Conceptual Review
Public Health Expenditure
Public health expenditure consists of recurrent and capital spending from government(central and local) budgets, external borrowings and grants(including donations from international agencies and non-government organizations) and social(or compulsory) health insurance funds. While general government Cross River public spending comprises the direct outlays earmarked for the enhancement of the health status of the population and/or the distribution of medical care goods and services among population by the following financing agents: central/federal/ state/provincial/regional, and local/municipal authorities; extra budgetary agencies, social security schemes and parastatals. All can be financed through domestic funds or through external resources.
Life Expectancy
Life expectancy is the most common indicator of health conditions in a country, and Nigeria’s life expectancy was estimated as just 47.9 years in 2003, from 45.8 years in 1999 but fell to 47 years in 2011. This level is one of the lowest in the world, below those of Ghana put at 54.4 years and Cameroon put at 48 years in 2011. Contributing to Nigeria’s low life expectancy are high rates of HIV/AIDS infection, although these are lower than the catastrophic levels found in some other African countries. The 2003 HIV/AIDS infection rate which was 5.4 percent remained almost unchanged from the previous survey year.
In its simplest form, health expenditures are defined on the basis of their primary or predominant purpose of improving health, regardless of the primary function or activity of the entity providing or paying for the associated health services. But to World Bank [2014], health expenditure covers the provision of health services (preventive and curative), family planning activities, nutrition activities, and emergency aid designated for health but does not include provision of water and sanitation.
In a different notion, WHO (2015) defines health expenditure as a measure of final consumption of health goods and services plus capital investment in healthcare infrastructure. In this context, health is a critical component in gauging the living standards of a nation or region. When linked with improvements with other variables like water, sanitation and nutrition, health is visualized as an input into and outcome of growth process, integrated socio-economic upliftment based on health status improvements which depicts a reflection and cause of ongoing development efforts towards human welfare.
Health Outcomes
It is an established fact that improvements in health of population as a whole definitely have a positive impact by generating social returns to individuals and communities. This explains on one hand that improved human capital is better capable of participating in economic activities, improved productivity at individual level and consequently, better living standards. On the other hand, better health status will result in lesser absence from work and reduces disease burden which translates into low economic cost in terms of providing health services and hence better coverage and better management of the available resources [Basta, et al. 1979]. While healthcare consumption represents investment in health at the individual level, provision of healthcare infrastructure and improvement in healthcare infrastructure, including healthcare personnel, constitute health investment at the state level. Thus, the state makes available healthcare facilities and personnel whereas individuals utilize these facilities to improve their health status. Thus, individual’s investment in health via medical care consumption is dependent on the availability of and access to healthcare services. Within the production function framework, healthcare is considered one of the several inputs in the health production function. Thus, healthcare is seen as input in the production of good health such as low mortality and higher life expectancy. Thus, healthcare is considered an input in producing, for example, zero or low mortality and higher life expectancy, hence the presence of health expenditure in the health production. Regardless of the approach used, healthcare is one of the means for individuals to improve their health status. However, the ability of individuals to undertake such investment or production activity is dependent on the availability of and access to health resources, whether provided by the public or private.
Following the externality that health presents, income poverty, welfare, and inequity issues, government provision of healthcare (including public health services) is necessary. It is for this reason that Ke et al. [2011] undertook a study with the aim of understanding the determinants of health expenditure in developing countries. The study data show great variation across countries in health expenditure as a share of GDP, which ranges from less than 5% to 15%. Apart from income, many factors contribute to this variation, ranging from demographic factors to health system characteristics. Their results suggest that health expenditure in general does not grow faster than GDP after taking other factors into consideration. Income elasticity is between 0.75 and 0.95 in the fixed effect model while, it is much smaller in the dynamic model.
CHAPTER THREE
METHODOLOGY AND DATA
Research Design
The econometric approach that was used in this study will be panel data regression in equations for infant, under-five and maternal mortality rates. The specification is elated to existing literature and it allows for ways through which health expenditure can affect the chosen health outcomes.
Thus, dependent variables that was used in the model are; Infant mortality (death between birth and age 1 per 1000 live births) Under-five mortality (probability of death by age 5 per 1000 live births) Maternal mortality (per 100000 live births)
Independent and control variables used are:
Health expenditure as a percentage of gross domestic product Per capita, public health expenditure for disaggregated analysis Per capita, private health expenditure for disaggregated analysis, Poverty proxy by per capita household consumption, Gross domestic product Malaria (incidence of malaria), Urbanization (as a percentage of the total population) Foreign Aid (net official development aid) per capita.
Model specification
Yit = f (Hit, Wit)
Where Yit is the health outcomes (infant mortality, or under 5 mortality or maternal mortality rate), Hit is total health expenditure and Wit is a vector of social-economic control variables.
In a reduced form, the Specification above can be rewritten as;
Yit = α + βI ln (ConsGdpit) + β2 ln (hegit) + β3 ln (gdp it) + β4 ln (mal it) + β5ln (urbanpopit) + β6 ln ( odacap it).
CHAPTER FOUR
DATA ANALYSIS AND INTERPRETATION.
Data Analysis
Based on our model specifications we analysed the effect of the independent variables on Life expectancy and Infant mortality rates separately, this is done so that we can capture the effect of public health spending without distortions in the model. For the sake of clarity life Expectancy and Infant Mortality Rates are chosen as proxy of Health Outcomes and are analysed separately.
The models were subjected to statistical and econometrics tests using E-views 8.0 software and the results presented below.
CHAPTER FIVE
CONCLUSION AND POLICY RECOMMENDATIONS
Summary
The study investigates the relationship between Public health expenditure and Health outcomes in Nigeria. Using Life expectancy and infant mortality rate as proxy of Health outcomes while recognising the effects of other variables such as HIV prevalence, Per Capita Income, Urban population. These variables were considered to be able to capture the extent to which public expenditure is effective in improving health outcomes of individuals in Nigeria. It was discovered in the study that a positive relationship exist between Public Health expenditure and health outcomes in Nigeria, this means that an increased Public Expenditure will lead to better health outcomes and therefore inconsistencies in public Cross River public spending may not achieve better health outcomes as the only way to ensure increase in health outcomes is to invest in the health sector massively and consistently.
From the results, it can be deduced that while public health expenditure, per capita income and urban population are positively related to life expectancy, the relationship between infant mortality rates and public health expenditure, per capita income, urban population and HIV prevalence rate. A number of policy lessons could be deduced from the results. Although the relationship between Per capita incomes is positive, it is not statistically significant. This tends to justify the notion that increase in per capita income does not necessarily imply improvement in health outcome, as considered in this study.
This problem could be traced to the widening gap in income distributions among all levels of citizens in the country. This suggests that government should concentrate on its redistributive role of income in order to bridge this income inequality gap and enhance the significance of per capita income on improving health outcomes. With HIV prevalence rate having negative relationship with infant mortality rate, it implies that increase in HIV prevalence rate does not always develop finance to stabilize the financial system except the increase in money supply is consistent with policies that would stimulate productive and economic activities.
Conclusion
The study analysed the relationship between public health expenditure and health outcomes in Nigeria using time series data from 1990 to 2017. The results showed that a negative relationship exist between public health expenditure and health outcomes whilst taking into consideration the effect of migration from rural to urban areas and HIV prevalence rate.
The introduction of health policies and reforms ssuch as NHIS significantly affected health outcomes in the year it was introduced, however the effects could not be sustained or improved due to the handicap the sector has always suffered in terms of funding. Therefore to achieve desired levels of health outcomes, proper funding of the sector and implementation are the major determinants.
Policy Recommendations
The study recommends that government should formulate and enact policies that would reduce HIV prevalence rate among the elderly population, as this would lead to reduction of its effect on infants’ mortality. This will be necessary in improving health outcomes in the health sector.
The Nigerian government should also adopt policies that will increase public expenditure in the health sector. This implies that increasing public health expenditure would be greatly helpful in moving Nigeria toward the SDGs target for health, although this is only a necessary condition in achieving those goals.
Government should also endeavour to improve income equality among citizens through its redistribution role in order to afford an increasing portion of the population access to larger income that will finance health care, though its effect is not very significant. A continuous rise per capita income consistently over a long period like we saw before the mid 2000s, could improve life expectancy.
The reduction in HIV prevalence rate should be of great concern to the Nigerian government because it can determine the level of life expectancy in the country due to its significant effect on life expectancy. If healthcare expenditure is to boost and promote better health status, there is need to pay attention on massive and efficient expenditures in the health sector. This might require the mobilization of massive resources and a combination of enhanced and improved domestic resource mobilization and increased foreign aids and grants. With increased demand for healthcare services and declining mortality over the years, it has been discovered that public health expenditure alone cannot cater for expansions of healthcare needs. In this regard, the government may need to enter into partnership with other stakeholders order to mobilize the required resources, encourage efficiency and flexibility in healthcare provisions.
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