Publication: Intertemporal Dynamics of Public Financing for Universal Health Coverage: Accounting for Fiscal Space Across Countries
Loading...
Date
2018-12
ISSN
Published
2018-12
Editor(s)
Abstract
As countries undergo their health financing transitions, moving away from external and out-of-pocket (OOP) financing toward domestically sourced public financing, the issue of fiscal space – that is, of finding ways to increase public financing in an efficient, equitable, and sustainable manner -- is front and center in the policy dialogue around universal health coverage (UHC). Although how money is expended is just as critical as the overall resource envelope, we analyze changes in per capita public financing for health in real terms, a proxy for realized fiscal space, within and across 151 countries over time. This allows for an assessment not just of trends in public financing for health but also of contributions from three macro-fiscal drivers -- economic growth, changes in aggregate public spending, and reprioritization for health -- exploiting a macroeconomic identity that captures the relationship between these factors. Analysis of data from 2000 to 2015 shows per capita public financing for health in low- and middle-income countries increased by 5.0 percent per year on average: up from US$60 (2.2 percent of GDP) in 2000 to US$117 (2.8 percent of gross domestic product [GDP]) in 2015. Some of the largest increases were in countries in the Europe and Central Asia (ECA) and East Asia and Pacific (EAP) regions. At 3.1 percent per year, annual growth in public financing for health was lower among high-income countries, albeit from a much higher baseline in 2000. Increases in on-budget external financing comprised most of the changes among low-income countries, whereas domestic government revenues dominated changes in composition of public financing among lower- and upper-middle-income countries. Public financing increased at a faster rate than OOP sources for health in most regions except for South Asia. Although there are important country-specific differences, it is notable that more than half of the increase in public financing for health was due to economic growth alone. For the remainder of the increase, aggregate public spending contributed more than reprioritization across low and lower-middle-income countries, whereas the reverse was true in high-income countries. One key point of note from the landscaping exercise summarized in the paper is the diversity of growth trajectories across countries and, especially, the volatility in trends over time. The implications are clear: capturing public financing with a single growth rate is not the best metric to characterize country experiences, many of which are punctuated by episodes wherein trends are flat or have varying degrees of growth rates (positive or negative). Although country context matters, the importance of economic growth for public financing for health underscores the critical need to situate, integrate, leverage, and proactively manage health financing reforms within a country’s overall macro-fiscal context and to assess different pillars of fiscal space holistically.
Link to Data Set
Citation
“Tandon, Ajay; Cain, Jewelwayne; Kurowski, Christoph; Postolovska, Iryna. 2018. Intertemporal Dynamics of Public Financing for Universal Health Coverage: Accounting for Fiscal Space Across Countries. Health, Nutrition and Population Discussion Paper;. © World Bank. http://hdl.handle.net/10986/31211 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Related items
Showing items related by metadata.
Publication Economic Impact of COVID-19(World Bank, Washington, DC, 2020-09)Coronavirus 2019 (COVID-19’s) impact has gone far beyond its direct effect on morbidity and mortality. In addition to adversely impacting non-COVID health care utilization, the pandemic has resulted in a deep global economic contraction due to lockdown policies and declining demand and supply of goods and services. As a result, most countries are experiencing lower levels of gross domestic product (GDP), rising unemployment, higher levels of impoverishment, and increasing income inequality. Some countries are more vulnerable to the economic contagion resulting from COVID-19, including those implementing more stringent lockdowns and those that are more globally integrated due to their dependence on trade, tourism, and remittances. In addition, countries with preexisting conditions of fiscal weakness due to higher dependence on external grant financing, low tax revenues, and large pre-crisis debt levels are struggling to implement countercyclical mitigative fiscal and monetary policies. In addition to declining economic activity, government revenues have declined, government borrowing is increasing, and public debt levels are projected to skyrocket globally. Higher debt levels will likely imply fiscal tightening for years to come. Implications for health financing are potentially dire, dependent in part on the combination of domestic government, external, and out-of-pocket financing for health that is extant across countries. Tentative projections indicate that, in the absence of reprioritization, growth in public spending for health can decline across most low- and middle-income countries in the region, including becoming negative in some cases, risking reversal of gains made toward expanding universal health coverage in recent years. To reduce the likelihood of such a scenario, and with the caveat that protecting levels of financing will not be effective if resources are not used properly to begin with, ministries of health will need to pay careful attention to planning and budgeting - demonstrating where waste can be reduced and efficiency enhanced - and prioritize within their outlays interventions that are the most cost-effective and equitable. At the same time, ministries of finance should improve the adequacy and predictability of outlays for the sector, taking a multiyear programming perspective and include potential additional resources that will be necessary to procure and deliver a COVID-19 vaccine, once an effective one becomes available. In doing so, they should consider augmenting resources via increasing the scope and breadth of health taxes and proactively seeking out debt relief opportunities, especially if these can be tied to efforts to reprioritize health within overall government budgets where this may be necessary. Whereas there is the perception that the health sector has been flooded with new resources to respond to the pandemic, it remains unclear to what extent these have been additional and not a result of reprogramming of outlays from other areas within health. To the extent COVID-19 presents an opportunity, it is one for removing any doubts that health and the economy are inextricably linked, nudging both ministries of health and finance to reevaluate their priorities, accountabilities, and performance to sustain improvements in both population health, including for ensuring pandemic preparedness, and economic performance.Publication From Double Shock to Double Recovery(World Bank, Washington, DC, 2021-03)“From Double Shock to Double Recovery (DSDR) – Implications and Options for Health Financing in the Time of COVID-19,” a discussion paper published in March 2021. The original paper used macroeconomic projections released by the International Monetary Fund in October 2020 to project the possible time path of health spending per capita in 178 countries and territories from 2020 to 2025 under different scenarios. They suggested that few countries had been spared by the global recession of 2020 and that in many countries, government spending, after initial increases in response to the crisis, was likely to fall in at least one, often multiple years. The paper showed that despite a projected return to global economic growth from 2021, low- and lower-middle-income countries (LICs and LMICs) would, with few exceptions, struggle to maintain health spending at levels sufficient to continue combating the pandemic. The paper discussed a range of policy options that countries could use to increase the available domestic resources for health in times of economic crisis. DSDR first technical update, “From Double Shock to Double Recovery – Widening Rifts,” published in September 2021, updated the analysis presented in the original discussion paper. This edition explored the implications of the new IMF projections for governments’ capacities to spend on health. It identified a group of 52 countries of special concern. It found that to change this dynamic, governments in these countries would need to take bold steps to substantially increase the share of their available resources allocated to health. The paper also showed that many LICs and LMICs would struggle to find the domestic resources to roll out COVID-19 vaccines to their populations and to strengthen pandemic preparedness and response, putting the economic recovery at risk. DSDR second technical update, “From Double Shock to Double Recovery – Old Scars, New Wounds,” published in September 2022, describes the new IMF macroeconomic projections. It explores the extent to which the need to pay interest on debt might reduce governments’ capacity to spend; and the implications for country health spending.Publication Government Health Spending Outlook - Projections Through 2029(Washington, DC: World Bank, 2024-11-08)This paper examines the implications of the IMF’s April 2024 macro-fiscal forecast updates on government health expenditure (GHE) across 170 economies through 2029, covering nearly all years remaining to achieve the Sustainable Development Goals (SDGs). The findings reveal wide disparities in governments' capacities to increase health spending, with differences not only observed across income groups but also within them. Primary concerns focus to two groups of low- and lower middle-income countries: the first group is projected to experience a contraction in real per capita GHE from 2019 and 2029, threatening to reverse progress toward the health SDG targets, while the other group faces stagnation in real per capita GHE, greatly limiting advancement. The insights presented are crucial for health policymakers and their external partners to respond to evolving macro-fiscal circumstances and stabilize investment growth in health. While increasing the priority of health in spending is a key policy option, it will not be sufficient on its own. Effective responses also require improving spending efficiency and addressing broader fiscal challenges. Without decisive action, many countries have little chance of achieving the health SDGs.Publication Assessing Fiscal Space for Health in the SDG Era(Taylor and Francis, 2018-01)Initially defined for overall public purposes, the concept of fiscal space was subsequently developed and adapted for the health sector. In this context, it has been applied in research and policy in over 50 low- and middle-income countries over the past ten years. Building on this vast experience and against the backdrop of shifts in the global health financing landscape in the Sustainable Development Goals (SDG) era, the commentary highlights key lessons and challenges in the approach to assessing potential fiscal space for health. In looking forward, the authors recommend that future fiscal space for health analyses primarily focus on domestic sources, with specific attention to potential expansion from the improved use and performance of public resources. Embedding assessments in national health planning and budgeting processes, with due consideration of the political economy dynamics, will provide a way to inform and impact allocative decisions more effectively.Publication Actuarial Costing of Universal Health Insurance and Coverage in Indonesia(World Bank, Washington, DC, 2011-04)This series is produced by the Health, Nutrition, and Population family (HNP) of the World Bank's Human Development Network (HDN). The papers in this series aim to provide a vehicle for publishing preliminary and unpolished results on HNP topics to encourage discussion and debate. The cost of a health insurance program will largely be determined by the size and composition of the covered population, the benefit package, cost sharing arrangements, the current and future supply of health care providers and facilities, and the provider payment mechanisms used. This note summarizes in broad strokes the subset of the possible Universal Coverage (UC) transition scenarios and their related costs in Indonesia. These scenarios were selected based on initial discussions with key stakeholders, and further broad-based discussion with stakeholders will be needed to finalize the design, financing and transition options. This note shows how decisions regarding the transition steps, benefit package and the choice of eligible population affect public Health Insurance (HI) expenditures as Indonesia transitions to UC. This work follows closely the earlier World Bank report health financing in Indonesia; a road map for reform.
Users also downloaded
Showing related downloaded files
Publication Lebanon Economic Monitor, Fall 2022(Washington, DC, 2022-11)The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication The Journey Ahead(Washington, DC: World Bank, 2024-10-31)The Journey Ahead: Supporting Successful Migration in Europe and Central Asia provides an in-depth analysis of international migration in Europe and Central Asia (ECA) and the implications for policy making. By identifying challenges and opportunities associated with migration in the region, it aims to inform a more nuanced, evidencebased debate on the costs and benefits of cross-border mobility. Using data-driven insights and new analysis, the report shows that migration has been an engine of prosperity and has helped address some of ECA’s demographic and socioeconomic disparities. Yet, migration’s full economic potential remains untapped. The report identifies multiple barriers keeping migration from achieving its full potential. Crucially, it argues that policies in both origin and destination countries can help maximize the development impacts of migration and effectively manage the economic, social, and political costs. Drawing from a wide range of literature, country experiences, and novel analysis, The Journey Ahead presents actionable policy options to enhance the benefits of migration for destination and origin countries and migrants themselves. Some measures can be taken unilaterally by countries, whereas others require close bilateral or regional coordination. The recommendations are tailored to different types of migration— forced displacement as well as high-skilled and low-skilled economic migration—and from the perspectives of both sending and receiving countries. This report serves as a comprehensive resource for governments, development partners, and other stakeholders throughout Europe and Central Asia, where the richness and diversity of migration experiences provide valuable insights for policy makers in other regions of the world.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.