Spending on health is growing faster than the rest of the global economy, accounting for 10 per cent of global gross domestic product, but people are still paying too much out of their own pockets, according to a new report from the World Health Organisation.
The out-of-pocket expenses are forcing 100 million people into extreme poverty each year, worldwide.
The report reveals a swift upward trajectory of global health spending, which is particularly noticeable in low and middle-income countries where health spending is growing on average six per cent annually compared with four per cent in high-income countries.
Health spending is made up of government expenditure, out-of-pocket payments, and other avenues that include voluntary health insurance, and employer-provided health programs.
Governments provide an average of 51 per cent of a country’s health spending, while more than 35 per cent of health spending per country comes from out-of-pocket expenses.
One consequence of this is 100 million people are pushed into extreme poverty each year. This despite reliance on out-of-pocket expenses declining around the world. It is just happening too slowly.
The report highlights a trend of increasing domestic public funding for health in low and middle income countries and declining external funding in middle-income countries
“Increased domestic spending is essential for achieving universal health coverage and the health-related Sustainable Development Goals,” said WHO Director-General, Dr Tedros Adhanom Ghebreyesus.
“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.
When government spending on health increases, people are less likely to fall into poverty seeking health services. But government spending only reduces inequities in access when allocations are carefully planned to ensure that the entire population can obtain primary health care.
In low and middle-income countries, new data suggests that more than half of health spending is devoted to primary health care. Yet less than 40 per cent of all spending on primary health care comes from governments.
“All WHO’s 194 Member States recognised the importance of primary health care in their adoption of the Declaration of Astana last October,” said WHO Director for Health Systems, Governance and Financing, Dr Agnes Soucat.
“Now they need to act on that declaration and prioritise spending on quality health care in the community.”
The report also examines the role of external funding. As domestic spending increases, the proportion of funding provided by external aid has dropped to less than one per cent of global health expenditure. Almost half of these external funds are devoted to three diseases – HIV/AIDS, tuberculosis and malaria.
While the report clearly illustrates the transition of middle-income countries to domestic funding of health systems, external aid remains essential to many countries, particularly low-income countries.
The new WHO report points to ways that policy makers, health professionals and citizens alike can continue to strengthen health systems.
“Health is a human right and all countries need to prioritize efficient, cost-effective primary health care as the path to achieving universal health coverage and the Sustainable Development Goals,” Dr Soucat said.