The Relationship Between Healthcare Financing and Social Protection in Ensuring Equity and Fiscal Sustainability

Aiymgul Kapenova, Ruslana ICHSHANOVA, Zagira ISKAKOVA

Economies, 2026

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DOI 10.3390/economies14080337
Data confidence 85 high
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Abstract

Background: Progress toward universal health coverage in Central Asia depends on the interaction between public healthcare financing, broader social protection, and the fiscal capacity of the state. The region is analytically important because five post-Soviet health systems share a common institutional legacy while differing markedly in income, informality, migration dependence, and public financing arrangements. Methods: The study examines a country–year panel for Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan over 2015–2024. Fixed-effects estimates are treated as the principal benchmark. Two-step System Generalized Method of Moments estimates are retained only as sensitivity evidence because the cross-sectional dimension is very small (N = 5). Out-of-pocket expenditure as a share of current health expenditure represents household financial burden, while changes in general government debt measure macro-fiscal pressure. Results: In the reported models, higher social protection expenditure and higher domestic general government health expenditure are negatively associated with the out-of-pocket share. The fixed-effects coefficients are −1.245 and −3.810, respectively; the corresponding System GMM sensitivity estimates are −1.830 and −4.102. Combined social and health expenditure is positively associated with the debt ratio in the fiscal model. These findings are associations rather than causal effects. An illustrative scenario analysis shows that the estimated financing gap to a 5% of GDP public health benchmark varies substantially across countries and assumptions. Conclusions: The results are consistent with a dual-channel framework in which public financing can shift health risk away from households while creating fiscal pressure when revenue mobilization and expenditure efficiency do not adjust. Policy implications therefore concern the composition, targeting, and financing of expenditure rather than spending expansion alone. The limited sample, incomplete interpolation audit trail, and incomplete archived GMM diagnostics require cautious interpretation and motivate replication with household and subnational data.