Health Expenditure Convergence in Iranian Provinces: A Panel Generalized Moment Model

Subject Areas : -Health economy

Elham Fatholahi ¹

1 - Doctor of Economics and Lecturer of Lorestan University, Lorestan, Iran,

Received: 2023-03-15 Accepted : 2023-04-26 Published : 2023-05-20

Keywords: Beta Convergence, Sigma Convergence, health costs, generalized panel moment,

Abstract :

Introduction: The development of the social sector is one of the key goals of the government of any country, especially less developed or developing countries. The importance of health as one of the key aspects of development and economic well-being of individuals and nations is increasingly recognized in the world. This can be seen from a series of reforms carried out by countries to increase investment in health in order to achieve the health Millennium Development Goals. The lack of investment in health and measures to address environmental and social determinants of health is a serious limitation to improve health outcomes in these countries. Considering that the convergence of governments in per capita health costs leads to a decrease in inequality or an increase in equality across regions, which will be a major development goal of a nation or governments, this research examines the process of convergence in terms of health costs. It evaluates per capita.Methods: In this research, the convergence of health expenditures per capita in the provinces of Iran is studied using the dynamic panel method. Therefore, for this purpose, the data related to 30 provinces of the country during the years 2007 to 2019 have been used. Due to the separation of Alborz province since 2010, the data related to this province has been calculated with Tehran province. In order to analyze the convergence process of per capita health costs of the provinces, the beta and sigma convergence method and the dynamic panel generalized moment model (Panel GMM) will be used.Results: The results showed that there is absolute and conditional beta convergence in health expenditure per capita in the provinces of Iran. The speed of convergence in government per capita expenditures on health is higher than private per capita expenditures, and this has been effective in the general convergence process of per capita health expenditures in each province. Also, the examination of the distribution of per capita health costs in each province indicates the existence of sigma convergence in the provinces of Iran.Conclusion: Although there is a path for convergence, this analysis has revealed the need to invest more resources in the field of healthcare. In fact, the current levels of investments that have been made in the health of the country are not enough to expand the huge project of the health sector. As the convergence of sigma in relation to private and public spending on each person's health showed, the dispersion of the mentioned components has decreased. This means that the variable that has a lower standard deviation (state health expenditures per capita) has created uniform and homogeneous expenditures in the health sector. Government expenses alone are not responsible for healthcare expenses, and the private sector needs to invest in this matter. In general, the health sector requires more expenses than public revenues. As a result, a problem is observed in the healthcare systems of most countries, and that is the pressure on government revenues. As a result, in terms of recommendations for health policies, diversification of financial resources for this level of health, treatment and health is one of the strategies that should be considered.

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