Health expenditure and health outcomes in Latin America and the Caribbean

Abstract

Objective. To determine the effect of public and private health expenditure on health outcomes in Latin American and Caribbean countries from 2000 to 2019. Methods. A health production function was used, wherein life expectancy at birth and infant mortality rate were considered as indicators of health outcomes. Panel data econometrics were applied, using data from a 33-country sample for the period from 2000 to 2019. Results. According to estimates, a 1% increase in public health expenditure is associated with a 0.019% increase in life expectancy, and a 1% increase in private health expenditure increases life expectancy by 0.023%. At the same time, a 1% increase in public health expenditure reduces the infant mortality rate by -0.168%, whereas the effect of private health expenditure on infant mortality is not statistically significant. Conclusions. The results provide evidence of the effect of public health expenditure in reducing infant mortality and increasing life expectancy, while private health expenditure has a positive effect only on the latter metric. The findings have important political implications for the countries of the Region in the post-pandemic context of limited fiscal space.