Towards equitable healthcare provision: convergence of public health spending and the role of decentralization in Malaysia

Abstract

This paper investigates the behavior of public health spending across different states in Malaysia, focusing on the convergence of per capita spending and the impact of decentralization on health expenditure disparities. Despite slight variations in life expectancy at birth, Malaysia can highlight its efforts to lessen dispersion in infant mortality, crude death rates, and crude birth rates among its states. The findings reveal a convergence in spending among states was observed from 2005 to 2019, with conditional models displaying faster convergence. The results highlight that factors beyond initial spending significantly influence health expenditure growth across states. State revenue positively impacts healthcare expenditures’ growth rate, while the impact of per capita federal transfers remains insignificant. The state’s fiscal capacity, the initial gross domestic product, and population growth significantly impact healthcare expenditure. The study suggests that a fair distribution of healthcare spending across states contributes to spatial equity in healthcare service provision.