The determinants of local government health expenditures in the provinces of the Philippines
Date
2005-04-06
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Abstract
Many functions were devolved to local government units with the passage of the 1991 Local Government Code, including the majority of health services. A number of problems faced by the decentralized health sector bring doubt to the efficiency gains from decentralization. This paper uses cross-sectional time-series regressions analyzing 2001 to 2003 data in studying how local government health expenditures are determined. It finds that local governments are sensitive to local health needs, as indicated by higher health spending in areas with poorer health status. Local governments with more financial resources are found to spend more on health care per capita. The management of more hospitals is another factor that leads to higher local government health spending. Substitution effects between DOH and local government health spending are observed, indicating that higher DOH spending leads to a reduction in the responsiveness of local governments to local health needs and responsibilities. The study also uses regressions to examine whether public health expenditures in 2001 affected health status in the following year. The regression results do not indicate that provinces with higher public health spending in 2001 enjoyed better health in the following year. This may mean that public health expenditures are ineffective. However, the possibility that it may take more than one year-for public health expenditures to lead to observable benefits should not be ignored.
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Local government, Health expenditures, Public health, Healthcare, LGU, Health determinants