The impact of changes in health status on the public budget: Panel data analysis

Health is one of the most basic rights of human beings gained at birth. According to the World Health Organization (WHO), health is expressed as "not only the absence of illness and disability, but also a state of complete well-being from a physical, spiritual and social point of view". From an economic point of view, health is considered the most important component of the accumulation of human capital and the labor supply chain. Healthy individuals together form a healthy workforce and contribute to the process of value added formation. Health services in general are semi-public goods/services. The use of health care provides both an individual benefit and a social benefit. Countries are making efforts to create a society of healthy individuals and to ensure the continuity of this society. For this reason, in many countries, health services are provided by the public hand and supported by appropriate financing methods. The general state of health of individuals and society is expressed by the concept of "health status". There are numerous scientific studies that show a close relationship between the health status of countries and Dec level of development. Due to the fact that public health depends on socio-economic and environmental factors, a large number of rations are used to measure health status. Countries that want to achieve the sustainable development goals are increasingly transferring resources to the health sector to improve their health status indicators. The improvement of health conditions along with the increase in health expenditures leads to an increase in the average life expectancy and an increase in the labor supply. The increase in labor productivity positively affects the well-being of the country. On the other hand, the increase in the average life expectancy, the ease of access to health services and the developments in health technologies are constantly increasing the amount of resources that should be allocated to health expenditures. Increases in expenditures on the health sector lead to an increase in the share allocated to health in general public expenditures. This situation leads to an increasingly negative impact on the public budget balance. On the one hand, health expenditures contribute to economic growth through the accumulation of human capital, while on the other hand, they create pressure to increase public expenditures. The main problem of the study is the negative impact of health expenditures on the public budget as well as its welfare-enhancing effect. Based on this dilemma, the main purpose of the study is to determine in which direction and to what extent changes in health status indicators affect the ratio of public health expenditures to general public expenditures, based on the sample of selected countries. In the study, six independent variables were used as indicators of health status: rough birth rate, life expectancy at birth, human development index, out-of-pocket health expenditures per person, private health expenditures rate and the ratio of the elderly population to the total population. As a dependent variable, the ratio of public health expenditures to general public expenditures was taken as the dependent variable. For the purpose of the study, the countries subject to analysis were determined to be two groups as developed (48 countries) and underdeveloped (28 countries) with a public share of more than 50% in health expenditures. The model established for the countries in both groups was examined using panel data analysis methods to cover the years 2005-2020. As a result of the study, and the ratio of the elderly population in developed countries, per capita out-of-pocket health expenditures growth overall public spending, public expenditure increases as the ratio, in contrast, in the Human Development Index, crude and private health expenditures of the increase in public health expenditures in the birth rate leads to a decrease in the relative share of that determination. In the model of less developed countries, life expectancy at birth and per capita out-of-pocket health expenditures and the growth of public health spending in contrast to the burden of increase, crude birth rate of the increase in private health expenditure and public health expenditure reduced its proportionate share of the increase in the elderly population that is concluded.