Health spending is growing at six per cent in low and medium income countries outstripping developed economies on four per cent although both are beating general global growth.
A new report Public Spending on Health a Look at Global Trends from the World Health Organization (WHO) shows a dramatic upward trajectory of global health spending
The report says that the health spending is made up of government expenditure, people paying for their own care which the report describes as “out-of-pocket payments”, and sources such as voluntary health insurance, employer-provided health programmes and activities by non-governmental organizations.
Each year 100 million pushed into extreme poverty
Governments provide an average of 51% of a country’s health spending, while more than 35% of health spending per country comes from out-of-pocket expenses. The report says that one consequence of this is that 100 million people are pushed into extreme poverty each year.
The report shows a trend of increasing domestic public funding for health in low and middle-income countries and declining external international funding in middle-income countries. Reliance on out-of-pocket expenses is declining around the world, albeit slowly.
Dr Tedros Adhanom Ghebreyesus, WHO Director-General, said: “Increased domestic spending is essential for achieving universal health coverage and the health-related Sustainable Development Goals. But health spending is not a cost, it’s an investment in poverty reduction, jobs, productivity, inclusive economic growth, and healthier, safer, fairer societies.”
In middle-income countries, government health expenditure per capita has doubled since the year 2000. On average, governments spend US$60 per person on health in lower-middle income countries and close to US$270 per person in upper-middle income countries.
In low and middle-income countries, the data suggest that more than half of health spending is devoted to primary health care though less than 40% of all spending on primary health care comes from governments.
The report notes that as domestic spending increases, the proportion of funding provided by external aid has dropped to less than 1% of global health expenditure. Almost half of these external funds are devoted to three diseases – HIV/AIDS, Tuberculosis (TB) and malaria.
The report identifies three significant areas for future work
- improving data availability and quality.
- Building on the expert knowledge of the health financing community in each country, improving consistency in categorizing expenditures to more accurately characterize health financing arrangements.
- Focussing on country level data work to distinguish capital from current expenditures and external from domestic sources and to identify transfers from government budgets to compulsory and voluntary health insurance programs.
The report notes, unsurprisingly that the distribution of health spending globally remains highly unequal. Despite GDP and health spending growing fastest in low and middle-income countries, a large gap persists between rich and poor countries. In 2016, median per capita health spending was over US$ 2,000 in high income countries but just a fifth of that (US$ 400) in upper-middle income and one-twentieth of that (US$ 100) in low and lower-middle income countries.
In high income countries, public spending on health per capita went from an average of US$ 1,357 in 2000 to US$ 2,257 in 2016, a 66% increase.
Middle income countries experienced an even greater rate of increase. In upper-middle income countries, public spending on health per capita in real terms doubled from approximately US$ 130 in 2000 to US$ 270 in 2016.
Similarly, in lower-middle income countries, public spending on health per capita rose from US$ 30 to US$ 58 over the same period. However, there are important variations across countries in all income groups. For instance, among middle income countries, 14 countries tripled their public spending on health per capita in real terms over 2000–2016, 28 countries doubled it, and three countries lowered it. The spending pattern is, however, different in low income countries.
In these countries, public spending on health per capita in real terms fluctuated considerably, increased over 2000–2004, decreased over 2004–2012 and began to grow again in 2013. By 2016, public spending on health per capita was about US$ 9 on average, only US$2 higher than in 2000.