Do private health expenditures encourage outbound health tourism? A panel data analysis

Health expenditures refer to the spending undertaken by individuals to improve their overall health status and constitute one of the fundamental resources required for the production and provision of healthcare services. In this context, private health expenditures include payments made for personal health insurance and direct healthcare services. While private expenditures in the health sector are generally intended to improve health outcomes and provide health security, they may pose a significant financial burden, particularly for low- and middle-income populations. Data published by international organizations such as the OECD and the World Health Organization (WHO) indicate a substantial increase in the share of private health expenditures within total health expenditures in many countries in recent years. The aim of this study is to examine the effect of private health expenditures on outbound health tourism and to analyze the direction of this relationship using panel data methods. For this purpose, annual data for 84 countries covering the period 2005–2022 were compiled from the World Bank and the United Nations Conference on Trade and Development (UNCTADstat) databases, and the analysis was conducted using panel data models. In the empirical models, income level, price level, physician density, and private health expenditures were considered as the main determinants. The persistence of outbound health tourism over time was assessed, and the robustness of the findings was tested through alternative model specifications. The results of the analysis indicate that private health expenditures have a positive and consistent effect on outbound health tourism. In contrast, physician density was found to have no statistically significant effect, while the impacts of income and price indicators varied depending on the model specification. In dynamic models, outbound health tourism exhibited strong persistence over time. Overall, the study demonstrates that countries' outbound health tourism performance is closely associated with the financing structure of their health systems and that private health expenditures constitute one of the key determining factors in this area. In this regard, the findings are expected to contribute to policy development processes aimed at health tourism.