Publication: Economic Impact of COVID-19: Implications for Health Financing in Asia and Pacific
Loading...
Files in English
4,534 downloads
Date
2020-09
ISSN
Published
2020-09
Editor(s)
Abstract
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.
Link to Data Set
Citation
“Tandon, Ajay; Roubal, Tomas; McDonald, Lachlan; Cowley, Peter; Palu, Toomas; de Oliveira Cruz, Valeria; Eozenou, Patrick; Cain, Jewelwayne; Teo, Hui Sin; Schmidt, Martin; Pambudi, Eko; Postolovska, Iryna; Evans, David; Kurowski, Christoph. 2020. Economic Impact of COVID-19: Implications for Health Financing in Asia and Pacific. Health, Nutrition and Population Discussion Paper;. © World Bank. http://hdl.handle.net/10986/34572 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 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 Intertemporal Dynamics of Public Financing for Universal Health Coverage(World Bank, Washington, DC, 2018-12)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.Publication Revealing the Missing Link(World Bank, Washington, DC, 2017-06-21)Every six hours, the death of a woman from the complications of pregnancy serves as the most vexing reminder of Indonesia’s challenges with maternal health (MH). This is incommensurate with Indonesia’s strong economic development and stature compared with regional peers, especially as MH is a marker of overall health system performance and affects economic opportunities especially for the poor. The maternal mortality ratio (MMR) is high and progress on improving MH outcomes has been slow, such that the MH Millennium Development Goal (MDG) has already been missed. This policy paper analyzes new data on the ‘missing link’ of primary MH service provision, i.e., private providers, which is critical given that 54 percent of all deliveries in Indonesia occurred in the private sector, compared with 22 percent in the public sector, although overall rates of institutional deliveries remain below target. Key findings from the analysis elucidate the potential value of the private sector in expanding access to MH services covered by the financial purchasing and strategic purchasing umbrella of JKN, the effectiveness of these private MH services, and patient satisfaction. The remainder of the policy paper is structured as follows: The next section provides some background on Indonesia, including general health-related outcomes and an overview of the country’s health system and financing. Section III focuses on MH outcomes and context, including comparisons with global peers, and provides an overview of provision, utilization, and financing of MH services in the country, underscoring the importance of private providers. Section IV summarizes the distributional context and service readiness of private MH providers across the 64 high-priority districts, including a comparison with public providers for context. Section V concludes with a summary of key findings and their policy implications.Publication Preventing, Detecting, and Deterring Fraud in Social Health Insurance Programs(World Bank, Washington, DC, 2018-11)This paper draws lessons from anti-fraud experiences in social health insurance programs of six selected countries across the income spectrum: Indonesia, the Philippines, Republic of Korea, Croatia, Turkey, and the United States. A standardized questionnaire was used to collect information on how the programs prevent, detect, and deter fraud. The questionnaire was supplemented by a literature review and conversations with key informants. The analysis summarizes similarities and differences in the legal framework, institutional mechanisms, and capacity to manage fraud. Across all countries, the primary responsibility for managing fraud lies with the public entity that administers the program. In terms of capacity, all program-administering agencies have dedicated anti-fraud units and staff. In addition, all countries have specific anti-fraud policies and guidelines that address fraud and have a clear operational and legal definition of fraud. In terms of preventing fraud, the use of pre-authorization screening for high-end procedures is common. For detecting fraud, most countries use anti-fraud ‘hotlines’ and encourage other forms of reporting of suspected fraudulent behavior; the use of ‘red flags’-triggers that identify suspicious claims based on deviations from norms, is also common. The level of sophistication in using data analytics to detect potential fraud, however, varies across countries. Social health insurance programs in higher-income countries are more likely to use advanced statistical and data-mining techniques compared to those in lower-income countries. All programs across all countries undertake post-reimbursement medical claims and beneficiary audits. In terms of deterring fraud, sanctions often include the use of financial penalties, cancellation of contracts, and criminal prosecutions; however, in most countries, public providers are not penalized and prosecuted to the same degree as private providers.
Users also downloaded
Showing related downloaded files
Error: Could not load results for 'https://openknowledge.worldbank.org/server/api/item/relateditemlistconfigs/c0d12466-3516-5860-9dc5-ab9f410bfba4_downloads/itemlist'.