Health Expenditure and Economic Outcomes

Health expenditure, encompassing both public and private outlays on medical services, pharmaceuticals and preventive care, lies at the heart of modern economic development. Robust investment in health systems not only drives improvements in life expectancy and reductions in infant and maternal mortality but also generates substantial returns through enhanced labour productivity, reduced disease burden and greater household savings. At the macroeconomic level, sustained health spending supports demographic transitions, underpins human capital accumulation and fosters resilience to epidemics and economic shocks. Conversely, underinvestment can perpetuate poverty traps, widen inequality and constrain growth. The balance between tax-based financing, social insurance schemes and out-of-pocket payments is critical for achieving universal health coverage without triggering catastrophic expenditure. Recent work has emphasised the importance of governance, intersectoral coordination and technology adoption in maximising the economic benefits of health outlays. By linking empirical evidence on health returns with budgetary policy and sustainable development objectives, researchers are elucidating pathways by which health expenditure can serve as both a social good and a catalyst for inclusive economic advancement.

Research from Nature Portfolio

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Health Expenditure and Economic Outcomes publication trend

The graph below shows the total number of articles in health expenditure and economic outcomes across all publications each year (not limited to Nature Index journals).

Technical terms

Health expenditure: Total spending on health goods and services by governments, households, insurance schemes and external donors.

GDP per capita: Gross domestic product divided by the total population, used to gauge average economic output per person.

Infant mortality rate: The number of deaths of children under one year of age per 1,000 live births in a given period.

Life expectancy at birth: The average number of years a newborn is expected to live under current mortality conditions.

Panel data analysis: A statistical method that examines multiple entities over time to control for unobserved heterogeneity and infer dynamic relationships.

References

1. Pathway for attaining SDG3: The role of ICT infrastructure, natural resources, and environmental sustainability. Sustainable Futures (2024).
2. Health care expenditure and health outcome nexus: new evidence from the SAARC-ASEAN region. Globalization and Health (2018).
3. The effects of health expenditure on infant mortality in sub-Saharan Africa: evidence from panel data analysis. Health Economics Review (2020).