DETERMINANTS OF PUBLIC HEALTHCARE EXPENDITURE IN SAUDI ARABIA

Dr. Abdelhalim E. El- Farouk*, Fadhel M. Banjar, Hosham M. O. Karar and Fowzi O. Elamin

ABSTRACT

Aim: Boosting health care expenditures is becoming a priority and a major health policy concern almost worldwide. To achieve solving that concern, it is crucial to know the main factors that underlie the growth in health care expenditures. This will help in supporting decision-makers to find best policies to manage health care costs. Here in this study, our aim is to examine the determinants of health care spending in Saudi Arabia over the period (1979-2013). Material and Method: Data used in this study have been collected from different sources that are mentioned in the text when come by. Variables included in this study include per capita GDP, number of physicians, population age structure variables; (population under 15 and/or over 65), infant mortality rate (IMR), population growth and lagged healthcare expenditure. These variables have been singled out by this study as the key determinants of health care expenditure. Variables have been displayed in their descriptive formats to check for their minimum, maximum, range, mean, standard deviation and coefficient of variation. A correlation matrix was produced to check for relationships between the variables. A stepwise regression method was adopted to described determine the factors that most affect and determine health care expenditure in KSA. Results: Our study findings revealed that the GDP per capita and the lagged health care expenditures (i.e. per capita healthcare expenditure of the previous year) are the major two factors that affect health care expenditure levels. Together, the two variables are responsible for 93.3% of the variations in the per capita health care expenditure. The regression model excluded all of the remaining variables because of the fact that they are statistically insignificant and do not fit with the model at a (0.05) level of significance. They do not contribute significantly to the explanation of the per capita health care spending variation. These variables are number of physicians, annual population growth rate, percent of the population aged 65 years and older, percent of the population under 15 years and infant mortality rate.

Keywords: Determinants, Healthcare, Expenditure, Elasticity, GDP, Physicians, Regression, Hospitals, Hospital-beds, IMR, Population 65 and over, Population under 15.