The Nexus between Public Health Care Expenditure and Health Outcomes in India

Abstract

The issue of financing health care has assumed greater significance in the developing world.There are two broad approaches of financing health care- market-based and government (public) financed. Considering the social welfare obligations, market mechanism is unlikely to operate at the best interest of the people who live at the bottom end of the income distribution. Hence, from welfare perspective, the government needs to intervene more vigorously in the areas of education and health. Governments have assumed considerable importance in the provision of certain goods and services of which health care is of significant importance…in provision of health care services free of cost or at subsidized prices (Gertler 1990). There is a need to understand the relationship (nexus) between increasing public spending and improving health outcomes. Therefore, this paper makes an attempt to examine the impact of government expenditure on health care in health outcomes in India.