Healthcare expenditure and health outcome nexus: Exploring the evidences from Oman

• Published date: 01 November 2020
• Author: Mohammed Al‐Azri,Fetima Al‐Mamari,Swadhin Mondal
• Date: 01 November 2020
• DOI: http://doi.org/10.1002/pa.2329

ACADEMIC PAPER

Healthcare expenditure and health outcome nexus: Exploring

the evidences from Oman

Mohammed Al-Azri

1

|Fetima Al-Mamari

2

|Swadhin Mondal

1

1

Department of Economics, University of

Nizwa, Nizwa, Oman

2

Department of Economics, University of

Nizwa and Oman Chamber of Commerce and

Industries, Nizwa, Oman

Correspondence

Swadhin Mondal, Office-11-H-11, Department

of Economics, CEMIS, University of Nizwa,

Nizwa, Oman.

Email: swadhin@unizwa.edu.om

Funding information

The Research Council

Present study examine the effect of public healthcare expenditure on health outcome

in Arab Golf region by using World Bank world development indicators data. This

study found that health expenditure had a significant effect in improving health out-

come in this region. The effects of health expenditures on infant mortality rate, child

mortality rate and maternal mortality rate are negative and statistically significant

implying that the public health expenditures is essential for improving population's

health. However, the present study shows that public health expenditure has no sig-

nificant effect in reducing death due to non-communicable diseases. The study also

found that per capita GDP had significant positive effects in increasing life expec-

tancy rate and reducing infant mortality rate in this region. Availability of safe drink-

ing water also played a significant positive role in increasing life expectancy and

decreasing infant and child mortality rate.

1|INTRODUCTION

Health is the vital component of human capital that increase the

human productivity, efficiency, income per capita and economic

development (Bloom & Canning, 2000; Bloom & Canning, 2003;

Novignon, Olakojo, & Nonvignon, 2012; Romer, 1996). According to

WHO Report (2001), investment in health increase the life expectancy

rate by 10% and economic growth by 0.35%. On the other hand low

budgetary allocation of resource create additional financial burden for

ill health. Global public health challenges can be met by investing in

health for both developing as well as developed countries. Global

challenges of poverty, inequality, mal-nutrition, under nutrition can

met through appropriate investment in health. Investment in health

also influence to enhance human capabilities and empowerment. It is

very important to all the countries to invest in health sector appropri-

ately. United nation urge to all developed and developing nation to

provide universal health coverage and ensure access to affordable,

quality health care services to all and contribute significantly towards

achievement of the UN Sustainable Development Goals. Many devel-

oped as well as developing countries increase the budget allocation to

achieve sustainable health outcome.

However, despite a strong economic as well as a significant

progress in health sector especially development healthcare infra-

structure, Arabic Gulf regions is still under represent in government

spending in health sector. In gulf region the public expenditure in

health sector is lower than 3.8% of GDP compared to global aver-

age of 8.7% (Khoja et al., 2017). Healthcare expenditure as a per-

centage of GDP in Saudi Arabia and Bahrain is 3.7% which is

relatively higher as compared to other GCC member states—UAE

(3.3%), Kuwait (2.7%), Oman (2.3%) and Qatar (1.9%) (Khoja

et al., 2017). Although many of the gulf countries especially Oman

developed a strong health care infrastructure over the last three

decades and also improved the health outcome in terms of life

expectancy rate, infant mortality rate and under five mortality rate

(WHO 2018). However, despite the development of healthcare

infrastructure and some extent of health outcome, Oman facing

various health care challenges. Rapid increase of burden of non-

communicable diseases (NCDs) like diabetics, cardiovascular dis-

eases, cancer and related diseases. In Oman, NCDs cause 68% of

total deaths and 18% of these deaths occur amongst people

between the ages of 30 and 70years (WHO 2018). However,

health care facilities particularly for specialized health care services

is grossly inadequate. Many times, the specialized treatment facili-

ties may be available in government hospital but it is not adequate

so that the patient need to wait for longer time—some times more

than a month. As a result due to medical emergency the patient

prefer to go to private hospital or go abroad for treatment. This

create another problem of increasing higher burden out-of pocket

Received: 2 April 2020Revised: 11 July 2020Accepted: 23 July 2020

DOI: 10.1002/pa.2329

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https://doi.org/10.1002/pa.2329