Elsevier

The Lancet

Volume 387, Issue 10037, 18–24 June 2016, Pages 2521-2535
The Lancet

Articles
National spending on health by source for 184 countries between 2013 and 2040

https://doi.org/10.1016/S0140-6736(16)30167-2Get rights and content

Summary

Background

A general consensus exists that as a country develops economically, health spending per capita rises and the share of that spending that is prepaid through government or private mechanisms also rises. However, the speed and magnitude of these changes vary substantially across countries, even at similar levels of development. In this study, we use past trends and relationships to estimate future health spending, disaggregated by the source of those funds, to identify the financing trajectories that are likely to occur if current policies and trajectories evolve as expected.

Methods

We extracted data from WHO's Health Spending Observatory and the Institute for Health Metrics and Evaluation's Financing Global Health 2015 report. We converted these data to a common purchasing power-adjusted and inflation-adjusted currency. We used a series of ensemble models and observed empirical norms to estimate future government out-of-pocket private prepaid health spending and development assistance for health. We aggregated each country's estimates to generate total health spending from 2013 to 2040 for 184 countries. We compared these estimates with each other and internationally recognised benchmarks.

Findings

Global spending on health is expected to increase from US$7·83 trillion in 2013 to $18·28 (uncertainty interval 14·42–22·24) trillion in 2040 (in 2010 purchasing power parity-adjusted dollars). We expect per-capita health spending to increase annually by 2·7% (1·9–3·4) in high-income countries, 3·4% (2·4–4·2) in upper-middle-income countries, 3·0% (2·3–3·6) in lower-middle-income countries, and 2·4% (1·6–3·1) in low-income countries. Given the gaps in current health spending, these rates provide no evidence of increasing parity in health spending. In 1995 and 2015, low-income countries spent $0·03 for every dollar spent in high-income countries, even after adjusting for purchasing power, and the same is projected for 2040. Most importantly, health spending in many low-income countries is expected to remain low. Estimates suggest that, by 2040, only one (3%) of 34 low-income countries and 36 (37%) of 98 middle-income countries will reach the Chatham House goal of 5% of gross domestic product consisting of government health spending.

Interpretation

Despite remarkable health gains, past health financing trends and relationships suggest that many low-income and lower-middle-income countries will not meet internationally set health spending targets and that spending gaps between low-income and high-income countries are unlikely to narrow unless substantive policy interventions occur. Although gains in health system efficiency can be used to make progress, current trends suggest that meaningful increases in health system resources will require concerted action.

Funding

Bill & Melinda Gates Foundation.

Introduction

Substantial health gains have been achieved over the last several decades. This progress has been used to argue that a grand convergence in health could be reached within a generation.1 This term has been defined to mean that infectious diseases and reproductive and maternal mortality for all countries could reach the level set by a group of middle-income countries. Although estimates for the necessary investment in low-income and middle-income countries exist, little is known about the availability of resources to achieve this grand convergence in health. What is clear is that even when financial support from abroad is included, the countries that need the largest health advances are precisely those spending the least on health.2 Underpinned by high child mortality and low life expectancy, spending on health amounted to just US$24 per capita in 2013 in the Democratic Republic of the Congo and $26 in the Central African Republic (in 2010 purchasing power parity-adjusted dollars), for example.3, 4

Existing literature suggests that gains in national income lead to increased health spending and that an increased amount of that expenditure is prepaid through government and private financing mechanisms.5 This observation is known as the health financing transition. However, the speed and magnitude of these changes varies substantially across countries, even at similar levels of development. Although two international organisations produce long-range government health spending estimates, no long-range estimates for total or private health spending for all countries are available.6, 7

The objective of this research was to fill this gap and estimate spending on health on the basis of past trends and relationships by source, for 184 countries, between 2013 and 2040. We used these estimates to measure progress towards international financing goals and assess if a health financing convergence will occur, which we take pragmatically to be a narrowing of the gap in per-capita spending between low-income and high-income countries.

Research in context

Evidence before this study

Substantial effort by researchers and government agencies has been dedicated to estimation of future health spending. Forecasting inputs and methods vary dramatically from country to country, and study to study. These studies tend to focus on a single country or small set of countries. On Jan 8, 2016, and April 4, 2016, we searched Google, Google Scholar, and MEDLINE for articles published in English with the search terms “health expenditure” and “health spending forecast”. The two endeavours that focus on a broad set of countries are led by the Organisation for Economic Co-operation and Development and the International Monetary Fund. The Organisation for Economic Co-operation and Development has estimated government spending on health and total spending on long-term care in high-income countries and four major middle-income countries up to 2060. The International Monetary Fund has estimated the annual percentage change in government health spending for all countries up to 2020. Both assess only government spending, report spending estimates only as a share of gross domestic product, and do not provide uncertainty intervals.

Added value of this study

This is the first study to estimate total health spending for a large set of countries. We estimate health spending for 184 countries from 2013 to 2040. We disaggregate our estimates by source, providing annual estimates for government health spending, prepaid private health spending, out-of-pocket health spending, and development assistance for health received, for each country. One important contribution of this study is that these four sources of health spending can be combined to measure total health spending. Previous studies focused on government health spending, excluding private spending and development assistance, which are crucial means to finance health spending for many countries, particularly low-income and middle-income countries. We report annual estimates as a share of gross domestic product and in purchasing power-adjusted, inflation-adjusted dollars, so that we can compare against notable health spending benchmarks. Furthermore, we compare the amount of health spending across income classifications and regions, assess progress in the health financing transition, and measure health financing inequality.

Implications of all the available evidence

This research highlights the persistence of health financing gaps and continued reliance on out-of-pocket health spending in some countries into the future. Even in 2040, 111 (60%) of the 184 countries are not meeting an international health financing target that 5% of gross domestic product be government health spending. Additionally, this research highlights global health spending inequality. These estimates indicate where change is most needed to bend health financing trajectories. In many cases, these countries are the world's poorest, with the largest disease burdens. This research emphasises that policy makers and global leaders need to work together to assess where more resources can be raised for health than at present and where existing resources can be squeezed to ensure essential health services are affordable for those most in need.

Section snippets

Data

We extracted health financing data from WHO's Global Health Observatory3 and the Institute for Health Metrics and Evaluation (IHME)'s Financing Global Health 2015 report.8, 9 The intersection of these two data sources is 184 countries from 1995 to 2013. WHO spending estimates by source are updated annually and draw on a diverse set of data from countries and international organisations. We adjusted these data by converting them into 2010 purchasing power parity-adjusted dollars. For these 184

Results

In 2013, $7·83 trillion was spent on health globally. By 2040, we expect health spending to expand to $18·28 (UI 14·42–22·24) trillion worldwide. Figure 1 provides estimates of country-specific health spending per capita. Most striking is the persistent gap between health spending in high-income countries relative to other countries, particularly in sub-Saharan Africa (table 1). By contrast, past trends and relationships suggest that low-income countries will continue to spend much less on

Discussion

On the basis of past trends and relationships, we expect that the future will include more resources spent on health than in the past. This increased spending corresponds to the expectation of the health financing transition, which suggests that as countries develop, they spend more on health than they did before. This expected growth is driven by long-term trends showing that, over time, countries spend an increasing amount on health. Previous research suggests that these increases are due to

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