Modeling the Determinants of Private health Spending across Sub-Suharan African Countries: A Macro Level Study

Abstract

Sub-Saharan African (SSA) countries faced huge health financing burden as out–of–pocket health spending remains the primary source of financing healthcare in the region. The region has experienced rising healthcare costs, with daunting implications on health outcomes. The objective of the study is to investigate the macroeconomic determinants of private health spending across SSA countries. The study used panel data covering 41 countries for the period 2010 to 2018. A dynamic data panel model was estimated using the generalized methods of moments. The result revealed that the proportion of the population above 65 years, HIV/AIDS prevalence rate, malaria prevalence rate, corruption perception index and physician density ratio were the uniform determinants of out–of–pocket as a share of total health spending and private health spending as a share of total health spending. However, inflation rate and per capita income significantly influence out–of–pocket health spending as a share of total health spending. This is among the foremost studies that examined the determinants of private health spending across SSA countries using a macroeconomic approach. The study established the dynamic relationship between macroeconomic variables and private health spending across SSA countries. Effective policy efforts should be directed toward reducing the high inflation rate, tackling high malaria and HIV prevalence rate, strengthening government institutions and tackling corruption, curbing high attrition rate of health workforce in the region, and improving per capita income. Also, governments in SSA should commit themselves to improving the share of health spending in total budgetary allocation. JEL Classification: H1, H6, H8