International Journal of Social Science Research (IJSSR)

Public Health Expenditure and Health Outcomes in India: A Comparative Analysis Between Odisha and Bihar

Health expenditures form an important tool for improving the health status of populations as well as reducing health disparities, especially in the case of underdeveloped economies. This research explores the dynamics between public health expenditures, economic growth and health outcomes, specifically in relation to the IMR in the states of Odisha and Bihar over the period of 1991-2023. For this purpose, the ARDL Bounds Testing technique is used to evaluate both short-term and long-term relationships among the selected variables. It was found that there exists a significant long-term cointegration relationship between public health expenditures and infant mortality. A comparison of findings implies that the state of Odisha has been successful in translating public health spending into improved health status. Specifically, the error correction coefficient for Odisha was approximately -0.08, which indicates that Odisha adjusts towards the long-term equilibrium state faster compared to Bihar, which has an error correction coefficient of -0.03. The robustness and validity of the estimation results are confirmed through the CUSUM and heteroscedasticity tests. The findings also show that although a rise in public health spending continues to be important for health improvement, more funding is not enough for Bihar. Better health outcomes require greater effectiveness in delivering health care services and ensuring that funds allocated are translated into results efficiently. Learning from the experiences of the state of Odisha, it can be recommended that Bihar focus on enhancing its healthcare systems by way of improved governance and execution ability rather than merely increasing its spending on healthcare. Keywords: Health expenditure, Health outcomes, ARDL Bounds test, Odisha and Bihar