Publication: Health Financing in a Time of Global Shocks: Strong Advance, Early Retreat
Loading...
Date
2023-05-01
ISSN
Published
2023-05-01
Editor(s)
Abstract
This latest paper of the Double Shock, Double Recovery series, Health Financing in a Time of Global Shocks, is a first attempt to comprehensively gauge how government health spending has fared in developing countries over the past three years – a period when the world faced shocks in swift succession. Throughout this challenging period, public investments in health have been critical to buffer their effects on human capital, most importantly, by controlling the COVID-19 pandemic. The study showed that real per capita central government health spending generally soared during the first two years of the pandemic. In 2020, it grew in per capita terms on average across all countries by approximately 21 percent, and in 2021, it stood at 25 percent above 2019 levels. The increase was primarily driven by governments prioritizing health in their spending. The initial strong advance in real per capita government health spending lost momentum in the third year of the pandemic, turning into an early retreat. On average, it contracted, from its peak of 25 percent to only 13 percent above the 2019 level, and close to its pre-pandemic trajectory. The reversal was even starker in the priority that governments gave to health. On average, the central health share in general government spending tumbled, from its maximum of 17 percent to only 5 percent above the 2019 baseline, falling back to its pre-pandemic trajectory. Hence, it was no longer the prioritization of health, but growth in general government spending that primarily helped bolster 2022 central government health spending above the 2019 level. The rapid decline of real central government health spending may have been a risky and costly retreat. In 2022, as governments were grappling with new spending demands – due to energy and food price hikes, and rapidly rising debt service costs, the Omicron caused another wave of COVID-19 infections and death worldwide, and many health systems struggled to cope with the backlog of non-COVID-19 services. The stark reversal in the priority given to health in government spending does not bode well for global health security and progress toward the health-related Sustainable Development Goals (SDGs), especially in countries where the macroeconomic outlook remains concerning, and the capacity to increase government spending limited. Rapid action of governments will be necessary in many developing countries to reverse this latest trend and secure the prioritization of health in government spending to put their countries and the world on a new, pandemic proof and sustainable development trajectory.
Link to Data Set
Citation
“Kurowski, Christoph; Kumar, Anurag; Mieses Ramirez, Julio Cesar; Schmidt, Martin; Silfverberg, Denise Valerie. 2023. Health Financing in a Time of Global Shocks: Strong Advance, Early Retreat. © World Bank. http://hdl.handle.net/10986/39864 License: CC BY-NC 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Government Health Spending Trends Through 2023(Washington, DC: World Bank, 2024-11-08)This paper presents the most recent trends in government health spending (GHS) across 63 low- and lower-middle-income countries, offering critical insights as nations approach the decisive period for achieving the Sustainable Development Goals (SDGs). After the pandemic-induced surge, sustained declines in GHS per capita followed. While these declines might appear to be a logical consolidation, the resulting modest growth in GHS per capita and decreases in health’s share of overall government spending between 2019 and 2023 pose significant challenges to the sustainability of government investment in health—compounded in many countries by contracting or stagnant government expenditure projected through 2029. These shifts cannot be ignored as countries need to restart progress toward Universal Health Coverage and other health-related SDGs after the COVID-19 setback, alongside building resilience to climate change and enhancing pandemic preparedness. Increasing the priority of health in spending is a key policy option, but 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 SDG.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 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 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 Universal Health Coverage for Inclusive and Sustainable Development : Country Summary Report for France(World Bank Group, Washington, DC, 2014-08)Situated in Western Europe, France is a high-income country with a gross national income (GNI) above $40,000 per capita. While the overall picture of health status is good, France contains apparent contradictions. Life expectancy is overall better than in many European countries, but premature male deaths remain high due to accidents, smoking, and alcoholism. Social and geographic inequalities in health are substantial, to the disadvantage of the northern parts of metropolitan France and overseas departments and territories. The French system largely relies on Bismarckian-based Statutory Health Insurance (SHI), established after the Second World War. Universal coverage was fully achieved in 2000 when a new law (Universal Medical Coverage Act, or CMU by its French acronym) expanded coverage to noncontributory low-income groups. Financial sustainability of the model has been a recurrent concern over the last three decades. Recent shifts in the funding model and the introduction of spending targets and efficiency measures have injected some flexibility to the system.
Users also downloaded
Showing related downloaded files
Publication Unlocking the Power of Healthy Longevity(Washington, DC: World Bank, 2024-09-12)The World Bank has a long history of engaging in population issues, ranging from childhood illness, nutrition, fertility, and safe motherhood to the aging process. It supports countries in addressing the implications of the demographic process through analytical work, technical advice, and financing to expand health coverage, redesign pension systems and social security, and undertake actions that support their economies. This report follows that tradition and analyzes the steps to promote healthy longevity and enhance the quantity and quality of human capital through attention to the burgeoning problem of Non-communicable diseases (NCDs). Research began before COVID and concluded after, drawing upon lessons from the pandemic. The report is intended to inform policy and action at the country level. The demographic transformation is a global phenomenon, and the increasing population of the middle-aged and elderly brings with it many challenges which are more acute in low- and middle-income countries where resources are more limited. The increasing number of adults calls upon countries to institute the social and economic measures of ensuring their wellbeing and making them optimally productive. Health must be at the center of these concerns, not only its preservation towards the end but its optimization throughout the life-course. This report builds on a compendium of analytical papers covering the economics of avoidable mortality, long-term care, behavior change, social protection, and whole-of-government solutions to support healthy longevity. It emphasizes that a great deal of ill health globally is a result of inequities—especially poverty and gender inequities that limit or delay access to and use of health care. High out-of-pocket payments for NCDs can plunge households further into poverty or extreme poverty. Women live longer with NCD morbidities.Publication World Development Report 2022(Washington, DC: World Bank, 2022-02-15)World Development Report 2022: Finance for an Equitable Recovery examines the central role of finance in the economic recovery from COVID-19. Based on an in-depth look at the consequences of the crisis most likely to affect low- and middle-income economies, it advocates a set of policies and measures to mitigate the interconnected economic risks stemming from the pandemic—risks that may become more acute as stimulus measures are withdrawn at both the domestic and global levels. Those policies include the efficient and transparent management of nonperforming loans to mitigate threats to financial stability, insolvency reforms to allow for the orderly reduction of unsustainable debts, innovations in risk management and lending models to ensure continued access to credit for households and businesses, and improvements in sovereign debt management to preserve the ability of governments to support an equitable recovery.Publication Impact Evaluation in Practice, Second Edition(Washington, DC: Inter-American Development Bank and World Bank, 2016-09-13)The second edition of the Impact Evaluation in Practice handbook is a comprehensive and accessible introduction to impact evaluation for policy makers and development practitioners. First published in 2011, it has been used widely across the development and academic communities. The book incorporates real-world examples to present practical guidelines for designing and implementing impact evaluations. Readers will gain an understanding of impact evaluations and the best ways to use them to design evidence-based policies and programs. The updated version covers the newest techniques for evaluating programs and includes state-of-the-art implementation advice, as well as an expanded set of examples and case studies that draw on recent development challenges. It also includes new material on research ethics and partnerships to conduct impact evaluation. The handbook is divided into four sections: Part One discusses what to evaluate and why; Part Two presents the main impact evaluation methods; Part Three addresses how to manage impact evaluations; Part Four reviews impact evaluation sampling and data collection. Case studies illustrate different applications of impact evaluations. The book links to complementary instructional material available online, including an applied case as well as questions and answers. The updated second edition will be a valuable resource for the international development community, universities, and policy makers looking to build better evidence around what works in development.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 Strategic Planning for Poverty Reduction in Vietnam : Progress and Challenges for Meeting the Localized Millennium Development Goals(World Bank, Washington, DC, 2003-01)This paper discusses the progress that Vietnam has made toward meeting a core set of development goals that the government recently adopted as part of its Comprehensive Poverty Reduction and Growth Strategy (CPRGS). These goals are strongly related to the Millennium Development Goals (MDGs), but are adapted and expanded to reflect Vietnam's national challenges and the government's ambitious development plans. For each Vietnam Development Goal, the authors describe recent trends in relation to the trajectories implied by the MDGs, outline the intermediate targets identified by the government, and discuss the challenges involved in meeting these. Relative to other countries of similar per capita expenditures, Vietnam has made rapid progress in a number of key areas. Poverty has halved over the 1990s, enrollment rates in primary education have risen to 91 percent (although there is a quality problem), indicators of gender equity have been strengthened, child mortality has been reduced, maternal health has improved, and real progress has been made in combating malaria and other communicable diseases. In contrast, Vietnam scores worse than other comparable countries in the areas of child malnutrition, access to clean water, and combating HIV/AIDS. A number of important crosscutting issues emerge from this analysis that need to be addressed. One such challenge is improving equity, both in terms of ensuring that the benefits of growth are distributed evenly across the population and in terms of access to public services. This will involve addressing the affordability of education and curative health care for poor households. Improvements in public expenditure planning are needed to align resources better to stated desired outcomes and to link nationally-defined targets to subnational planning and budgeting processes. There is also a need to address capacity and data gaps which will be crucial for effective monitoring.