After an early surge of spending during the COVID pandemic, public health layouts by countries at all income levels declined in 2022, on average, as compared to 2021.

Meanwhile, there was a 60% increase overall in per-capita health expenditures between 2000 and 2022 – but in low income countries this was largely driven by a sharp rise in out-of-pocket spending (OOP), according to WHO’s 2024 report on global health expenditures, released on the eve of Universal Health Coverage Day, 12 December.  

In low income countries, public spending on health has in fact stagnated since the turn of the millennium, with governments de-prioritizing health spending in national budgets while international donor aid made up for an increasing share of the shortfall. 

40 x 40: Only 40% of spending covered with just $40 per person by public health authorities

By the end of 2022, as countries emerged from the COVID pandemic, out-of-pocket spending, per capita, in low-income countries stood at slightly more than 40% of health expenditures. And  overall spending averaged $40 per person annually – less than half of the minimal baseline WHO estimates is needed to run a health care system. 

The report emphasizes the urgent need for increased domestic health spending to meet  2030 Universal Health Coverage goals, said WHO’s Director General Dr Tedros Adhanom Ghebreyesus in a launch of the report this week at WHO’s Geneva Headquarters. 

“Between 2000 and 2022 global spending per capita grew by more than 60% outpacing GDP,” Tedros said. 

On the plus side, that increase is critically correlated with significant improvements in life expectancy, including lower maternal and child mortality. But there is a big minus as well: 

 “Over the same period, governments in low income countries consistently deprioritized health in national budgets,” Tedros observed. “So while the increase in health spending is welcome, the trends in the sources of that spending are concerning…. Out of pocket health spending is the most inequitable type of spending, while aid is volatile and dependency is a major issue for low income countries. 

“Increasing domestic health spending must therefore be a policy priority for all countries to reduce financial hardship caused by out of pocket spending and aid reliance.”

Report accompanied by launch of the world’s largest global health spending database 

The report’s publication coincided with the launch of a new WHO global health expenditure  database – also marking 25 years since WHO began tracking health finance systematically.  

Billed as “the world’s largest global health spending database,” it covers spending by more than 190 countries since the year 2000, covering health expenditures by governments, donors and households. 

“These products are not just numbers,” Tedros stressed.  “They are used widely by governments, development partners, international organizations, academia and civil society to monitor financial trends, to assess equity and efficiency in health spending and to guide evidence based health financing decisions nationally and globally. 

“This is especially important in a time of increasingly tight budgets with many competing demands.”

Insights into how countries responded to the COVID pandemic – and afterwards

While most countries increased public health spending for a while during the pandemic, the across-the-board decline seen as countries emerged from COVID, reflects a worrisome trend, he added. This is particularly in light of the big gap between present day spending and the aims of the 2030 Sustainable Development goal for UHC. 

“In 2022, domestic public health spending per capita actually decreased for the first time since 2010,” Tedros observed, “Although it did increase significantly during the COVID 19 pandemic, it’s too soon to tell which direction spending on health will go. It could return to pre pandemic levels, or it could continue on a declining trend, putting us even further off track. 

“We therefore are at a time of uncertainty as countries emerge from the pandemic. Enormous challenges remain.” 

Among those, about one half of the world’s population still lacks access to one or more essential UHC services, such as primary health care. And over two billion people face financial hardship due to out-of pocket spending strains. 

In many low-income countries, public health spending is a fraction of minimum health system needs

In 42 low-income countries, mainly in Africa and South Asia, domestic public spending, per capita, on health remains below $30 per person per year, pointed out Kalipso Chalkidou, Director of WHO’s Department on Health Financing and Economics. 

“And that’s way lower than the $80 to $90 that we estimate is needed to support necessary workforce and essential commodities in low income countries,” she said. 

In some 35 low- and lower-middle income countries government health spending, or the share of government budget allocated to health, actually declined during the COVID-19 pandemic response and recovery of 2019-2023, the report also points out.

“Gandhi said that it’s not just words, but actions that express priorities,” Chalkidou said. “These are not just numbers, and the time for action is now.” 

Gap between low income countries and everyone else is growing larger 

“Government spending from domestic sources is absolutely essential for moving towards UHC,” added Ke Xu, senior health finance analyst, who led the work on the 2024 report, “Out of pocket payments are the most inequitable way to finance health services.”

And the gap between overall spending in low income countries and all other nations is only growing. 

Between 2000 and 2022, overall spending on health in low-income countries – from out of pocket, public and donor sources, grew from about $25 to about $30 on average.

“But even that is lower than what lower-middle income countries spent on health 20 years ago,” she pointed out. “So you can see the magnitude of the differences across income level. 

“And in upper middle income countries, we’re now around $600 per capita, while in high income countries spending is about $3000 per person. So it’s not difficult to imagine the differences in the countries across income levels, in terms of the availability of the services, the quality of the services, and also the financial accessibility of the services.”  

While in lower income countries, out-of-pocket spending represents the biggest part of national health expenditures, in all other income groups, public spending by the government plays the leading role.

Out of pocket spending also increased significantly in lower-middle income countries, while more gradually in upper middle-income ones. It is in the high income countries, therefore, where financing trends are healthiest, with out of pocket spending almost flat over the past 20 years.

“In the high income countries, it is very clearly, is the domestic government spending that has driven all the [spending], while the out of pocket (OOP) is very stable and at the lower level,” Ke said. 

Interest in tracking health spending grew over time 

While tracking patterns of health spending is a critical core task at WHO today, it wasn’t always that way. 

It was only in the 1980s that the Organization of Economic Cooperation and Development (OECD) first began to consolidate and report on member states’ health spending at annual meetings. 

In 1993, the World Bank’s publication of the a milestone World Development Report ‘Investing in Health’, sharpened interest in the issue, underlining the importance of public health expenditure  to development overall. 

In 1999, WHO established its health finance program. But it wasn’t until 2011 that WHO’s first global health expenditure database was published, with the inaugural health expenditure report published in 2017.  Overtime, the scope and scale of the data has been expanded in collaboration with countries and other partners, Ke said, with primary health care indicators first added in 2018. In 2022, data on vaccine spending was added, reflecting the concerns raised by the pandemic with access. 

“Data matters, because data drives transparency. “It’s important for equity purposes, because that’s the only way we can see who’s left behind – who is benefiting and who is not from the investments, and also we can understand who’s bearing the growing burden of out-of-pocket expenses,” Chalkidou said.

In 2022 and 2023, the issue was also the focus of a series of Future of Global Health Initiatives consultations, led by Kenya and Norway. The consultations, involving several dozen countries, bilateral and international partner agencies, culminated in a meeting in Zambia in November 2023, with a “Lusaka Agenda” etching a way forward to strengthen domestic public health spending in low-income countries.

Adding spending data on emergency preparedness, pharma spending and more 

The WHO data repository is expected to continue growing, Chalkidou said, citing national budget data as one planned feature: “to see how countries do or do not execute this budget [in their spending].” 

Spending on emergency preparedness and response, is another expanding point of interest, Chalkidou noted, to help track how countries are planning for possible future pandemics. 

“We’re also working to improve the tracking of primary health care spending,” she added. “The latest data from OECD shows a reduction in spending on WASH and on primary health care – whilst at the same time, ODA (overseas development aid) has been growing towards pandemic preparedness and response. But these are really unacceptable trade-offs.” 

“Finally, we’re keen to do more and better tracking of pharmaceutical spending, because we know that spending on drugs is driving out of pocket spending and poverty in many places.”

Ensuring countries routinely capture spending data efficiently

The WHO thrust also aims to push countries to routinely collect, and efficiently report on their own health expenditure data – rather than relying upon donors or multilateral agencies to perform that task on their behalf. 

“We want to move away from expensive, manual, retrospective and consultant-led, data extraction exercises, more to routine, prospective and automated solutions,” Chaldikou said.

“Where we can, we want to work with countries to integrate financial information with health data and link to financial management information systems.

“These systems are used by the Ministries of Finance to routinely capture budgets and expenditures in the standard format, typically aligned to countries on accounting standards,” she pointed out – although the same processes and standards are not always are not always used in health ministries’ own accountancy. 

“We need sustainable investments by WHO, by partners and by member states themselves to institutionalize these processes.”

Forthcoming WHA resolution by Nigeria on health finance aims to raise ambition

While the threat to low-income families from out-of-pocket spending is obvious, the gap between insurance coverage and healthcare costs can be a threat to financial stability even in higher income countries and households, observed Victor Nwaoba Itumo, Minister at Nigeria’s UN Mission in Geneva. 

“Countries need to do more when it has to do with health financing,” he said. “In the most advanced global economies, the cost of health [services] for households is on the high side.  Even the middle class in most societies find there’s a threat to their finances due to health challenges.”

With that in mind, Nigeria is leading the development of a new World Health Assembly resolution on health finance, due to be presented at the May 2025 meeting, which will appeal to countries and international partners to increase health spending.

It remains to be seen exactly what targets WHA member states might agree to support on domestic outlays, if any. A 2019 report by WHO recommended that at least 1% of GDP should be spent on primary health care, a target recalled in the September 2023 UN High Level Declaration on UHC. Other WHO and expert assessments have cited a figure of 5% of GDP as a better goal for overall public health expenditures. Internally, some professionals question the extent to which one-size-fits-all targets negotiated at WHA can in fact usefully motivate action – or not. 

“There are three major areas, relating to solutions being tabled by Nigeria,” Itumo said of the draft resolution. Those include provisions for: “strengthening and providing some support for health financing of households within countries; for what countries can do at international level together to make sure they create support for health financing; and what multilateral institutions, including financial institutions, can do to support health finance.”  

Building up other parts of the health ecosystems, such as domestic R&D and medicines manufacture, can also make healthcare more affordable while supporting development, he added.  

Can’t achieve UHC by 2030 without addressing these trends

“We’ve said public health spending is a priority, but government spend isn’t showing that,” said Bruce Aylward, Assistant Director General for WHO’s UHC Division, of the report’s findings.

“Domestic spending in low income countries is flat and stagnant – that’s hugely alarming in the current environment. And …out-of-pocket spending is going the wrong direction.

“We cannot achieve UHC by 2030 without addressing these things. And as we look forward, we also face three big challenges: economic headwinds are going to be worse for countries for this next period. The debt burden – debt servicing burden – is huge. Some 3 billion people live in countries where they’re spending more on debt than they are on these kind of [health] services, which are crucial.

“And of course, there are other priorities emerging post pandemic for countries. So what are we going to do with this report? Well, the very first thing who is going to do is act on it, and we’re hoping all member states, all partners, will do the same thing. On UHC day [Thursday], the theme this year is ‘Health- it’s on the government’ and that’s a wonderful theme.”

–Updated 25.12.2024 

Image Credits: WHO Global Health Expenditure Database0, Health Policy Watch , WHO Global Health Expenditure Repository, WHO GLobal Health Expenditure Data Repository, HP Watch, Flickr: SteFou!, HP Watch , WHO.