Trends in household out-of-pocket health expenditures and their underlying determinants: explaining variations within African regional economic communities from countries panel data

The persistently high out-of-pocket health spending (OOPHE) in Africa raise significant concern about the prospect of reaching SDG health targets and UHC. The study examines the convergence hypothesis of OOPHE in 40 African countries from 2000 to 2019.

We exploit the \({\text{log }}t\) $\text{log}t$ , club clustering, and merging methods on a panel of dataset obtained from the World Development Indicators, the World Governance Indicators, and the World Health Organization. Then, we employ the multilevel linear mixed effect model to examine whether countries' macro-level characteristics affect the disparities in OOPHE in the African regional economic communities (RECs).

The results show evidence of full panel divergence, indicating persistent disparities in OOPHE over time. However, we found three convergence clubs and a divergent group for the OOPHE per capita and as a share of the total health expenditure. The results also show that convergence does not only occur among countries affiliated with the same regional economic grouping, suggesting disparities within the regional groupings. The findings reveal that countries' improved access to sanitation and quality of governance, increased childhood DPT immunization coverage, increased share of the elderly population, life expectancy at birth, external health expenditure per capita, and ICT (information and communication technology) significantly affect within-regional groupings’ disparities in OOPHE per capita. The results also show that an increasing countries’ share of elderly and younger populations, access to basic sanitation, ICT, trade GDP per capita, life expectancy at birth, childhood DPT immunization coverage, and antiretroviral therapy coverage have significant impacts on the share of OOPHE to total health expenditure within the regional groupings.

Therefore, there is a need to develop policies that vary across the convergence clubs. These countries should increase their health services coverage, adopt planned urbanization, and coordinate trade and ICT access policies. Policymakers should consider hidden costs associated with access to childhood immunization services that may lead to catastrophic health spending.