Public health investment, performance and productivity in municipalities in the interior of the state of Bahia

Abstract

The objective of this article is to analyze the effect of public investment in health services (low and medium complexity) on the productivity of the single health system in cities of the interior of Bahia with 50,000 inhabitants. The Ordinary Least Squares (OLS) and the Generalized Moments Method (GMM) are adopted as the empirical strategy. The results indicate that public health expenditure has no positive effect on the productivity of health services in the municipalities studied, with a different sign than expected, suggesting that the increase in public health expenditure is accompanied by an inefficient allocation of resources. In addition, the self-financing capacity of the municipalities was found to be more relevant to productivity, from which it can be concluded that the dynamics of municipal revenue allows better conditions for the implementation of health policies, especially those focused on primary care.