Global Health Spending Reached Record Level During Height of COVID Pandemic

Global spending on health increased during 2021 at the height of the COVID-19 pandemic, reaching a record $9.8 trillion or 10.3% of global gross domestic product (GDP) – mostly as a result of governments devoting more domestic resources to health,

Country spending was highest on hospitals, accounting for 40% of expenditure, followed by ambulatory care (outpatients) providers (19%–24%) and pharmacies (16%–23%). 

The fastest growth in spending was on preventive care providers, such as public health institutions and disease control agencies. 

This is according to the World Health Organization’s (WHO) Global Health Expenditure Report 2023, based on data from 50 countries.

However, the per capita spending was “unequal”, the report notes, with high-income countries spending an average of $4001 per person in comparison to a mere $45 in low-income countries. Upper-middle-income countries spent $531, which was substantially more than the $146 per person in lower-middle-income countries.

“The distribution of global spending on health remained highly skewed in 2021: 79% was in high-income countries, which are home to less than 16% of the world population,” according to the report. 

Low-income countries accounted for only 0.24% of the global health expenditure, despite having an 8% share of the world’s population.”

Spending on COVID-19 rose in real terms in 39 of 48 countries with data, accounting for 11% of government and compulsory insurance health spending in 2021, up from 7% in 2020. 

There was “no evidence” that the additional COVID-19 spending meant countries spent less on other diseases, or that spending on COVID-19 vaccines meant less money for testing and treatment, the report finds, stating: 

“The analysis suggests that the increased spending for COVID-19 did not crowd out spending for other health needs, although it might have affected the rate of growth of spending for these other purposes.” 

In addition, out-of-pocket spending on health in low-income countries fell in 2020 and 2021 but rose to pre-pandemic levels in high, upper-middle and lower-middle-income countries in 2021 after a decline in 2020.

Lack of data on spending patterns

The WHO said that action is still needed at the domestic and international levels to improve data collection on spending patterns. 

“While most countries regularly report aggregated health spending data, few consistently report the critical details that underpin these high-level results. Accordingly, only a partial view of the spending dynamics during the COVID-19 pandemic – by provider, function, and disease and condition – is possible in this report.”

The report also notes the lack of information on health capital investment “which limits the insights into this critical area of health policy”. 

“More effort is needed, therefore, to improve data collection and increase the number of countries developing and reporting disaggregated health account data. Key to this is institutionalising health account practices at the country level.”

Hard to sustain higher spending levels

External aid was “crucial” in supporting government spending in 2021 in low and lower-middle-income countries. However, sustaining government health spending and external aid at 2021 levels may be challenging given “the deterioration in global economic conditions and the rise in debt-servicing obligations”.

“Amid this more difficult financing environment, a key challenge for countries will be to resist the urge to de-prioritize government spending on health. Doing so risks rolling back progress towards universal health coverage,” according to the report.

Image Credits: WHO African Region , WHO PAHO.

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