ABSTRACT
BACKGROUND: The Central Government of India introduced the National Health Mission (NHM) in 2005 to improve health outcomes by enhancing publicly financed (government) health expenditure and health infrastructure at the state level. This study aims to examine the effects of the state-level heterogeneity in publicly financed spending on health services on major health outcomes such as life expectancy, infant mortality rate, child mortality rate, the incidence of malaria, and immunization coverage (i.e., BCG, Polio, Measles, and Tetanus). METHODS: This study investigates the relationships between publicly financed health expenditure and health outcomes by controlling income and infrastructure levels across 28 Indian States from 2005 to 2016. Along with all states, the empirical analysis has also been carried out for high-focus and non-high-focus states as per the NHM fund flow criteria. It has applied panel fixed-effects and random effects model wherever required based on the Hausman test. RESULTS: The empirical results show that publicly financed health expenditure reduces infant mortality, child mortality, and malaria cases. At the same time, it improves life expectancy and immunization coverage in India. It also finds that the relationship between publicly financed health expenditure and health outcomes is weak, especially in the high-focus states. CONCLUSIONS: Given the healthcare need for achieving desirable health outcomes, Indian States should enhance publicly financed expenditure on health services. This study augments essential guidance for implementing public health policies in developing countries.
