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Background  Health care expenditure has been low over the years in developing regions of the world. A majority of countries in these regions, especially sub-Saharan Africa (SSA), rely on donor grants and loans to finance health care. Such expenditures are not only unsustainable but also inadequate considering the enormous health care burden in the region. The objectives of this study are to determine the effect of health care expenditure on population health status and to examine the effect by public and private expenditure sources.    Methods  The study used panel data from 1995 to 2010 covering 44 countries in SSA. Fixed and random effects panel data regression models were fitted to determine the effects of health care expenditure on health outcomes.    Results  The results show that health care expenditure significantly influences health status through improving life expectancy at birth, reducing death and infant mortality rates. Both public and private health care spending showed strong positive association with health status even though public health care spending had relatively higher impact.    Conclusion  The findings imply that health care expenditure remains a crucial component of health status improvement in sub-Saharan African countries. Increasing health care expenditure will be a significant step in achieving the Millennium Development Goals. Further, policy makers need to establish effective public-private partnership in allocating health care expenditures.

The effects of public and private health care expenditure on health status in sub-Saharan Africa: new evidence from panel data analysis