Macroeconomic Factors Affecting Out-of-Pocket Payments for Health: Evidence from Panel Data Analysis of SAARC Countries

The high Out-of-Pocket(OOP) payments for healthcare, and limited health insurance coverage in SAARC countries poses economic hardship to common mass and curtails healthcare access. This paper examines factors affecting OOP payments for healthcare in SAARC countries, focusing on particularly macroeconomic, demographic, and social determinants. The main aim of the paper is to compare healthcare expenditure patterns across these nations and assess the factors influencing OOP payments in the region. The panel data analysis was employed to fulfill the objectives. The fixed effect model reveals that a one percent increase in GDP per capita, consumer price index (CPI), and the population aged 65 years and above leads to changes in OOP payments by 1.08, 0.09 percent, and 1.20 percent, respectively. But the random effect model shows that a 1 percent increase in GDP per capita, remittance inflow, CPI, population aged 65 years and above, mean years of schooling, and domestic government healthcare expenditure changes OOP payments by 1.47 percent, 0.72 percent, 0.06 percent, 0.18 percent, and 0.64 percent, respectively. The fixed effect model explains over 98 percent of the variation in OOP payments, while the random effect model accounts for over 87 percent. The findings reflect that GDP per capita, CPI, domestic government healthcare expenditure, and the population aged 65 years and above significantly influence OOP healthcare payments in SAARC countries. However, the effects of remittance inflows and mean years of schooling remain inconclusive.