Examining the Impact of Health Care Expenditures on Health Outcomes in the Middle East and North Africa (MENA) Region

Objective: To examine the impact of health care expenditures on selected health outcomes for 19 countries in the Middle East and North Africa (MENA) region. Methods: We used panel data collected by the WHO and the World Bank for 1990-2010 to estimate the impact of both government and private health care expenditures on infant, underfive, and maternal mortality rates. Pooled ordinary least regression, random effects, and Hausman-Taylor instrumental variable models were used to examine the relationship between health care expenditures and selected health outcomes. Results: The results show that after controlling for confounding factors, both government and private spending on health care significantly improve infant, under-five, and maternal mortality in the MENA region. The relationships are causal in nature. Specifically, a percentage increase in per capita government expenditures reduces the infant mortality rate by 8.6-9.5 deaths per 1000 live births (p<0.01), the under-five mortality by 10.3-12.1 under-five deaths per 1000 live births (p<0.01), and maternal mortality by 26.0-26.3 deaths per 100000 live births (p<0.01). Similarly, a percentage increase in the log per capita private expenditures reduces the infant mortality rate by 7.2-8.1 deaths per 1000 live births (p<0.01), under-five mortality rate by 9.59. 8 deaths per 1000 live births (p<0.01), and the maternal mortality rate by 25.8-25.9 deaths per 100000 live births (p<0.01). Conclusion: Overall, we observe a notable improvement of the selected health outcomes in the MENA region from 1990 to 2010 mostly due to government and private health spending on health care. Consistent with existing literature, improvements in access to safe drinking water, increasing share of births attended by the health personnel, and adult literacy rate also reduce infant, under-five, and maternal mortality rates. Introduction There is no doubt that health outcomes have been improving in developed countries amid increasing health expenditures. For example, the average life expectancy at birth in the OECD area has increased over the last fifty years by about ten years, while infant mortality rate has fallen more than tenfold. Over the same period, share of health expenditures in gross domestic product rose from a little over 3 percent to almost 10 percent (OECD, 2012). Infant, under-five, and maternal mortality rates are most widely used indicators of health status. Infant mortality rate is the number of deaths of infants under one year of age per 1000 live births in a given year. Worldwide, approximately 11 million infants die each year, of which more than 90% occur in the developing world (UNICEF, 2011). Infant mortality rate consists of two components. One is the neonatal mortality rate, which takes into account deaths occurring in the first four weeks of life. Leading causes of neonatal mortality are problems arising during pregnancy (congenital abnormalities, low birth weight), delivery (birth injuries, asphyxia), after delivery (tetanus, other infections) (UNICEF, 2011). The second component is post neonatal mortality rate, which is calculated from deaths occurring in the remainder of the first year. Whereas neonatal mortality rate is related to maternal and obstetric factors, the most important