Background: Bangladesh, a rapidly developing country, is experiencing a critical phase where economic growth and environmental sustainability must be balanced. The swift industrialization and urbanization have led to increased energy consumption and carbon emissions, negatively impacting public health and healthcare expenditures. This study determined the intricate relationships between healthcare expenditure and its determinants—economic growth, CO2 emissions, urbanization, and natural resource use—in Bangladesh. Methods: Utilizing a dataset from 2004 to 2023, this study applies advanced econometric methods, including the dual adjustment approach, spectral causality, fully modified ordinary least squares (FMOLS), dynamic ordinary least squares (DOLS), and canonical cointegrating regression (CCR). Results: Results demonstrate a significant positive correlation between economic growth, urbanization, natural resources, and CO2 emissions on healthcare spending. The findings underscore that CO2 emissions and urbanization are substantial contributors to rising healthcare costs, while natural resources and economic growth present varying impacts based on different econometric models. The dual adjustment approach provides robust evidence of cointegration, revealing the long-term interactions among these variables. Conclusion: In conclusion, the study emphasizes the urgent need for effective national policies to mitigate healthcare costs driven by environmental degradation and economic growth. By understanding these relationships, policymakers can better manage health expenditures while promoting sustainable development in Bangladesh. The research highlights the necessity of integrating environmental and health policies to achieve a balanced growth trajectory.
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