Influence of Health Expenditure on COVID-19 Contraction: Theoretical and Empirical Analysis

Abstract

Intensive economic development leads to the inevitable consequences of anthropogenic impact on the environment. Air pollution, soil degradation, water pollution and lack of clean drinking water lead to deteriorating human health and increasing the burden on the health care system. Globalization and integration have also become important drivers of the rapid spread of the COVID-19 pandemic. All this leads to the need to transform the health care system and the model of its financing, and adapt it to these challenges. The aim of this work is to identify theoretical (based on bibliometric analysis) and empirical (based on panel data regression modelling) patterns of the impact of health care expenditure on the effectiveness of the COVID-19 combating. The theoretical part of the work involves the implementation of bibliometric analysis based on 262 Scopus publications, in the title, keywords or annotations of which both concepts such as «health expenditure» and «COVID-19» are mentioned. The practical implementation of this task is carried out using VOSviewer v.1.6.17. According to the results of the bibliometric analysis, contextual, geographical and temporal patterns of publishing activity of scientists on certain issues were revealed. The empirical part of the work involves a statistical analysis to identify the relationship between morbidity and mortality due to COVID-19 and the volatility of the share of current health expenditure in GDP and its structure. The task of this stage is to determine the benchmarking model of financial support of the health care system, which demonstrates the greatest resistance to COVID-19. The analysis was conducted on the basis of data for 13 countries in Europe and Asia (Azerbaijan, Belarus, Armenia, Georgia, Estonia, Latvia, Lithuania, Moldova, Poland, Romania, Slovakia, Hungary and Ukraine). According to statistical analysis, the most resistant to COVID-19 is the health care system of Estonia, which is characterized by the volume of health care expenditure at 4-6% of GDP. At the same time, in the structure of the current health care expenditure, 25% is private expenditure and 75% is government expenditure, and external financing is almost non-existent. However, similar proportions of public and private expenditure in other countries do not ensure similar resistance to coronavirus, so this ratio is not a benchmark. A more in-depth analysis using panel regression modelling in Stata 12/SE revealed the positive impact of public, private and external health expenditures on reducing mortality, as well as the positive impact of increasing current health expenditures on life expectancy. The obtained theoretical and practical results can be useful for scientists and government officials in the context of optimizing the financial support of the health care system, taking into account its effectiveness in resisting national and global threats (COVID-19).