Determinants of Health Care Expenditure and Health Outcomes: A Time Series Analysis Using VAR and Cointegration Approach

This study investigates the determinants of health care expenditure and health outcomes using a time series framework over the period 1991–2024. The analysis investigates the dynamic relationship between total health care expenditure, life expectancy at birth, birth rate, death rate, maternal mortality ratio, population growth, GDP growth rate, and labor force participation rate. To ensure the robustness of the results, the study employs Phillips–Perron unit root tests, Johansen cointegration analysis, vector autoregression (VAR) modeling, and regression analysis. The unit root results reveal mixed stationarity among variables, while the Johansen cointegration test demonstrates that the variables have a long-term equilibrium connection. The VAR results indicate significant dynamic interactions between health care expenditure and key demographic and macroeconomic indicators. Regression findings suggest that life expectancy and death rate significantly influence health care expenditure, while population growth and mortality indicators affect health outcomes. Stability diagnostics using the CUSUM test confirm the structural stability of the estimated model over the study period. The findings highlight the importance of demographic changes and macroeconomic conditions in shaping health care expenditure and public health outcomes. The study provides important policy implications by emphasizing the need for increased health investment, improved health infrastructure, and sustainable economic growth to enhance population health. Overall, the study adds empirical evidence to the body of current literature on the long-run and short-run dynamics between health care expenditure and health indicators using advanced time series econometric techniques.