Effect of out-of-pocket health expenditure on the welfare of the Ugandan population

Abstract

This study delves into the complex and multifaceted relationship between out-of-pocket healthcare expenditure and welfare, with a focus on Uganda as a case study. The investigation employs an Autoregressive Distributed Lag (ARDL) modeling approach to assess both short term and long-term dynamics. The study is rooted in the recognition that healthcare expenditure is a critical factor affecting the welfare and overall well-being of a population. The analysis covers the period from 2001 to 2020, providing valuable insights into the nuanced interplay between healthcare spending and welfare outcomes. This study employed the correlational research design to analyze the impact of out-of-pocket healthcare expenditure on the welfare in Uganda. The study utilized data from the world bank to investigate this relationship. Along with some pre-estimations such as normality, stationarity, cointegration and trend analysis, this study employed the ARDL model with the error correction term to assess the adjusted, short and long run relationship between out-of-pocket expenditure and welfare. The study found a significant relationship between past welfare values and current ones, suggesting changes in welfare over time are influenced by past values. It also showed a strong positive long-run relationship between out-of-pocket healthcare spending and Ugandan welfare, though short-run effects may lead to temporary decreases. The study suggests that policymakers should consider welfare effects when formulating welfare policies. It emphasizes the need for investment in healthcare infrastructure and access, as increased spending positively impacts population welfare. This includes improving services, ensuring accessibility, and enhancing delivery quality. Strengthening health insurance programs can help reduce out-of-pocket healthcare expenses by providing financial protection and ensuring access to necessary medical services without substantial hardship. Policymakers should consider implementing safety nets and financial assistance programs to mitigate the short-term negative impact of increased healthcare expenditures on welfare, providing temporary relief and cushioning the financial impact.