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Global Health Econ Sustain Prolonged impact of health-care expenditure on poverty

Table 7. Unrestricted cointegration rank test people living in poverty, with the normalized poverty gap
increasing from 19.13% to 22.69%. Smaller families, longer
Hypothesized Eigenvalue Trace 0.05 critical Prob.** hospital stays, use of private health facilities, and chronic
no. of CE (s) statistic value illness increased the likelihood of poverty as a result of
None * 0.075795 43.59105 15.49471 0.000 OOP medical expenses. This study clarifies the intricacies
At most 1 * 0.03673 14.03294 3.841466 0.0002 of healthcare spending and how it affects poverty. The
*Denotes rejection of the hypothesis at the 0.05 level. study, which focuses on India, highlights the need for
**Mackinnon-Haug-Michelis (1999) p-values. tailored financial protection systems by highlighting the
Abbreviation: Prob.: Probability
impoverishing impacts of OOP health costs. The wider view
of your analysis, which considers low- and middle-income
60 nations, emphasizes the necessity for balanced policy

40 interventions in health-care finance while highlighting
the possible unexpected repercussions of rising health-
20 care spending on poverty levels. Conversely, Wagstaff et al.
0 (2003) concentrated on how health-care spending affects
poverty in low- and middle-income nations. The study
-20
evaluated the relationship between poverty levels and OOP
-40 health costs using data from household surveys. According
to their results, households can become impoverished
-60
50 100 150 200 250 300 350 because of high healthcare costs, especially in nations
with inadequate social safety nets or no access to health
CUSUM 5% Significance
insurance. Li et al. (2023) conducted a study to investigate
Figure 2. Stability test results. the relationship between poverty and health-care spending
in China. They discovered that health-care expenses greatly
health-care spending. These cascading effects necessitate increased family poverty, particularly in rural areas where
careful consideration of the broader economic context health insurance was less accessible. The study emphasized
when interpreting this study’s results. how crucial comprehensive health-care reform is to
While the findings of this study indicate a significant reducing the cost of healthcare for disadvantaged groups.
long-term association between health-care spending Furthermore, Leive and Xu (2008) examined how health-
and the poverty rate, as demonstrated by the ARDL care costs affect poverty in 11 Asian and African nations.
model and the ECM, it is important to consider the issue They concluded that expensive OOP medical treatment
of endogeneity when interpreting these results and to contributes significantly to poverty, especially in low-
acknowledge the limitations in establishing causation, as income nations with inadequate healt-hcare systems.
emphasized by Lucas (1976). According to the research, strategies aimed at lowering
direct health-care expenses may be able to reduce poverty.
5. Conclusion Most researchers consider the relationship between

Both the ECM and ARDL models reveal a significant long- poverty and health-care use, tending to the issue from
term relationship between healthcare expenditure and the point of view that investing in health could be a base
poverty rate. The ECM model shows a slow adjustment for progressing financial improvement, proposing more
speed, while the ARDL model predicts a positive association advantageous financial exercises, and thus financial
between healthcare expenditure and poverty rates. A unit development. In contrast, this study accepts that health-
increase in health-care expenditure leads to a 1.92 unit care expenditure plays a critical role in expanding the
increase in the poverty rate, suggesting that enhancing poverty rate. As a result of the ARDL Long Run Form and
health-care spending in low- and middle-income countries Bounds Test, the ECM test results, and the ARDL test, it
may inadvertently contribute to poverty levels. These is proposed that there is a critical positive relationship
findings support the Sriram (2020) study’s conclusion between the poverty proportion at $1.90 a day as a rate of
that severe poverty affects the poor in India, where OOP the population and health care expenditure. Thus, if the
costs account for 62.6% of all medical spending. The high use of health services expands by one unit, the poverty
cost of healthcare has a detrimental effect on household ratio will rise by approximately 2%. This is quite high,
finances and has forced many people into poverty. Using demonstrating a significant issue and playing a basic role
data from the National Sample Survey Organization, it was in human life. Global health expenditures are expanding,
discovered that there was an increase in the number of and worldwide investment in health continues to increase.

Volume 2 Issue 1 (2024) 7 https://doi.org/10.36922/ghes.2383