Examining the impact of selected macroeconomic variables on private healthcare expenditures: evidence from South Asia

Purpose: This study examines the impact of selected macroeconomic variables, such as fiscal debt, public healthcare expenditure, economic growth, and economic freedom on private healthcare expenditure and interconnections among these variables in South Asian countries. This study aims to elucidate the mechanisms driving private healthcare expenditure in South Asia.

Design/methodology/approach; The study employed dynamic econometric methodology, including co-integration tests, non causality tests, panel ARDL models, and static econometric methodology such as random- and
fixed-effects ordinary least squares to estimate the impact and interconnections among these variables. The present study utilized panel data for the period 2000 -2021 from the World Development Indicators (WDI) and Heritage Foundation.

Findings: The key findings of this study show that economic growth positively influences private health expenditure, while economic freedom and government debt negatively affect it, potentially leading to higher household inequality. However, there is a need to increase current health expenditure, as it positively impacts private health expenditure in South Asia.

Research limitations/implications: The findings of this study have various practical implications, including the adverse effect of economic freedom, which may be due to households' preference for publicly available supply-side healthcare services. The current public health expenditure in South Asia must be increased to ensure that, in the long run, economic freedom positively affects households' access to private
healthcare services. Therefore, this study raises concerns regarding the protection of the objectives of universal health coverage (UCH) as outlined in the SDGs.

Originality/value: This study comprehensively examines the impact of selected macroeconomic variables on private healthcare expenditure. The findings of this study are statistically significant and robust. Consequently, these findings provide policymakers and healthcare administrators with insights to guide innovations that improve access to and affordability of healthcare services in South Asia.