Nandakumar Ak

The income elasticity of health care spending in developing and developed countries

To date, international analyses on the strength of the relationship between country-level per capita income and per capita health expenditures have predominantly used developed countries’ data. This study expands this work using a panel data set for 173 countries for the 1995–2006 period. We found that health care has an income elasticity that qualifies it as a necessity good, which is consistent with results of the most recent studies. Furthermore, we found that health care spending is least responsive to changes in income in low-income countries and most responsive to in middle-income countries with high-income countries falling in the middle. Finally, we found that ‘Voice and Accountability’ as an indicator of good governance seems to play a role in mobilizing more funds for health.

Health expenditures, health outcomes and the role of good governance

This paper examines the relationship between country health spending and selected health outcomes (infant mortality and child mortality), using data from 133 low and middle-income countries for the years 1995, 2000, 2005, and 2006. Health spending has a significant effect on reducing infant and under-5 child mortality with an elasticity of 0.13 to 0.33 for infant mortality and 0.15 to 0.38 for under-5 child mortality in models estimated using fixed effects methods (depending on models employed). Government health spending also has a significant effect on reducing infant and child mortality and the size of the coefficient depends on the level of good governance achieved by the country, indicating that good governance increases the effectiveness of health spending. This paper contributes to the new evidence pointing to the importance of investing in health care services and the importance of governance in improving health outcomes.

Health reform for children: the Egyptian experience with school health insurance

In June 1992, the Peoples Assembly of Egypt passed Law 99 expanding health insurance to cover all school children. This was one of the most important initiatives undertaken in recent years by the Ministry of Health, and it effectively increased the number of beneficiaries covered by the Health Insurance Organization (HIO) from 3.75 million in 1988 to about 14 million in 1993. This paper first examines the policy processes for the introduction of this innovation in Egypts health system. Next, the paper discusses the implementation and consequences of the new policy in terms of coverage, financing, benefits, and delivery of services, along with data on utilization and expenditures. Several important lessons derive from this analysis. First, major reform efforts are possible when there is a strong political commitment and the proposed program and solutions are acceptable to the key stakeholders. Second, compromises and trade-offs are essential to construct a politically feasible and ethically acceptable reform initiative. Third, while these trade-offs might yield short-term gains, the trade-offs in the long term may undermine the reforms capacity to achieve the anticipated equity enhancements and can potentially undermine the financial sustainability of the reform.

Utilization of outpatient care in Egypt and its implications for the role of government in health care provision.

This paper uses data from a household survey to analyze the utilization of health care by the poor in Egypt. We find that even though the government provides free care, a significant proportion of the poor visit fee-for-service private providers. As a result, the poor and the indigent spend disproportionately larger amounts on health compared to the rich. We take this as evidence of the failure of the governmental policy of public provision of health care to lead to considerable gains in rates of utilization by the poor. Our study provides empirical support for arguments favoring greater emphasis on government financing of health care instead of the direct provision that characterizes many developing countries.

Determinants of National Health Expenditure

This article is an updated version of the previous edition article by A.K. Nandakumar, Marwa E Farag, volume 2, pp. 136–145,

The Effect of Demand- and Supply-Side Health Financing on Infant, Child, and Maternal Mortality in Low- and Middle-Income Countries

Abstract —Demand- and supply-side health financing programs that improve maternal and child health are being implemented more frequently; however, there is limited evidence estimating their impact on maternal, infant, and child mortality at the macro level. The purpose of the study was to determine the impact of four specific types of demand- and supply-side health financing programs on infant, child, and maternal mortality at the global level and by county income categories. The following four demand- and supply-side health financing programs were chosen for inclusion in the analysis: conditional cash transfer programs, voucher programs, community-based health insurance, and pay-for-performance schemes. A fixed effects model was estimated, using panel data for 147 countries over the period 1995–2010, to measure the impact of these four demand- and supply-side health financing programs on infant, under-five, and maternal mortality. The model was estimated for all countries and for three country income categories: low, lower–middle, and upper–middle income. The implementation of demand- and supply-side health financing programs has increased over time, with 45 out of 147 countries in the data set implementing at least one of these programs by 2010. The results show that there is a significant decline in infant and under-five mortality from community-based health insurance when examined across all countries. There is also an impact from demand- and supply-side health financing when examined across the three country income classifications, with vouchers and pay-for-performance showing a varying impact on reduced infant, under-five, and maternal mortality depending on the country income classification. Health insurance schemes with a broad population reach, such as community-based health insurance, can have a large impact on infant and under-five mortality. Demand- and supply-side health financing programs, such as pay-for-performance and voucher programs, have a varying impact on infant, under-five, and maternal mortality depending on the income level of the country.