Global Spending on Health: Coping with the Pandemic 2023 PDF

Global spending on health Coping with the pandemic Global spending on health Coping with the pandemic Global spending on health: coping with the pandemic ISBN 978-92-4-008674-6 (electronic version) ISBN 978-92-4-008675-3 (print version) © World Health Orga...

Global spending on health Coping with the pandemic Global spending on health Coping with the pandemic Global spending on health: coping with the pandemic ISBN 978-92-4-008674-6 (electronic version) ISBN 978-92-4-008675-3 (print version) © World Health Organization 2023 Some rights reserved. This work is available under the Creative Commons Attribution-NonCommercial-Share- Alike 3.0 IGO licence (CC BY-NC-SA 3.0 IGO; https://creativecommons.org/licenses/by-nc-sa/3.0/igo). Under the terms of this licence, you may copy, redistribute and adapt the work for non-commercial purposes, provided the work is appropriately cited, as indicated below. In any use of this work, there should be no sug- gestion that WHO endorses any specific organization, products or services. The use of the WHO logo is not permitted. If you adapt the work, then you must license your work under the same or equivalent Creative Com- mons licence. 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Design and layout by Communications Development Incorporated Contents Acknowledgementsiv Abbreviationsv Key messages vi Overview ix Chapter 1 Higher global spending on health during the pandemic 1 Chapter 2 Responding to new demands: spending by health care provider 19 Chapter 3 Balancing priorities: ­COVID-19 and other disease spending 39 Chapter 4 Building for the future: health capital investment 55 Annex65 iii  Acknowledgements This report is the product of the collective effort process­—­K ingsley Addai Frimpong, Baktygul Akka- of many people around the world, led by the Health zieva, Ogochukwu Chukwujekwu, Valeria De Oliveira Expenditure Tracking program in the World Health Cruz, Tamás Evetovits, Sophie Faye, Diana Gurzadyan, Organization (WHO). Chandika Indikadahena, Gael Kernen, Awad Mataria, The core writing team led by Ke Xu includes (in Diane Muhongerwa, Claudia Pescetto, Tessa Tan alphabetical order) Maria Aranguren Garcia, Julien Torres Edejer, Tsolmongerel Tsilaajav, Lluis Vinals Dupuy, Natalja Eigo, Dongxue (Wendy) Li, Lachlan and Ding Wang­—­and global health accounts experts McDonald, Julio Mieses, Laura Rivas, Eva Šarec, Hap- who helped countries prepare the data for the 2023 satou Touré and Ningze Xu. update of the Global Health Expenditure Database­—­ WHO is grateful for the contributions of numerous Jean-­Edouard Doamba; Evgeniy Dolgikh; Fe Vida N individuals and agencies for their support in making Dy-­Liacco; Mahmoud Farag; Consulting Group Cura- this report possible. WHO thanks those who provided tio Sarl, led by David Gzirishvili; Kieu Huu Hanh; Eddy valuable comments and suggestions on the report: Mongani Mpotongwe; Tchichihouenichidah (Simon) Chris James, David Morgan and Michael Mueller Nassa; Daniel Osei; Ezrah Rwakinanga; Sakthivel Sel- from the Organisation for Economic Co-­operation varaj; and Neil Thalagala. and Development (OECD); Agnes Couffinhal, Anurag WHO also recognizes the contributions to data Kumar, Christoph Kurowski and Ajay Tandon from quality improvement by numerous World Bank staff. the World Bank; Viroj Tangcharoensathien and Wala- WHO’s ongoing collaboration with the OECD Health iporn Patcharanarumol from the Thailand Interna- Accounts Team and Eurostat has played a key role in tional Health Policy Program; Nirmala Ravishankar ensuring the routine production and appropriate cat- from ThinkWell; global health accounts experts Patri- egorization of health spending data from most high cia Hernández and Cor van Mosseveld; Sarah Barber, income countries. Most important of all, WHO extends Fahdi Dkhimi, Xiaoxian Huang, Inke Mathauer, Bruno its appreciation to the country health accounts teams Meessen and Nathalie Vande Maele from WHO; and and the strong support provided by the ministries of Deepak Mattur from the Joint United Nations Pro- health of WHO Member States. gramme on HIV/AIDS. Finally, WHO thanks the Bill & Melinda Gates Foun- Sincere appreciation goes to Joe Kutzin, the former dation; the Global Fund to Fight AIDS, Tuberculosis and coordinator of the unit, for his enduring support in global Malaria; the Gavi Alliance; the United States Agency health expenditure tracking. His dedication played a piv- for International Development; the European Commis- otal role in demonstrating the value of this global public sion; the Government of the French Republic; and the good in both policy development and implementation. Foreign, Commonwealth & Development Office of the Even after retiring, he continued to champion the pro- United Kingdom of Great Britain and Northern Ireland gramme and provided invaluable comments and sug- for their funding support for WHO’s health financing gestions for early drafts of the report. work, which has played a critical role in making health WHO acknowledges the many WHO colleagues who spending tracking data, and the analysis of these data, made great contributions to the report and the data a valuable global public good. iv Abbreviations ­­COVID-19 Coronavirus disease CRS Creditor Reporting System DIS Classification of diseases and conditions GDP Gross domestic product GHED Global Health Expenditure Database HC Classification of health care functions HIV/AIDS Human Immunodeficiency Virus/Acquired immunodeficiency syndrome MDG Millennium Development Goals OECD Organisation for Economic Co-Operation and Development OOPS Out-of-pocket spending PHC Primary health care SDG Sustainable Development Goals SHA 2011 System of Health Accounts 2011 UHC Universal health coverage WHO World Health Organization v  Key messages Higher global spending on health during the pandemic After a surge in 2020 during the first year of the ­­COVID-­19 pandemic, global spending on health rose again in 2021, to US$ 9.8 trillion, or 10.3% of global gross domestic product (GDP). Average health spending per capita increased in all income groups except low income coun- tries, where it fell. In most income groups, growth in health spending in 2021 was underpinned by a sharp budg- etary response from governments. In high and upper-­middle income countries, this reflected a sharply higher prioritization of health within government budgets, while in lower-­middle income countries, it reflected mainly an overall increase in general government spending. Average out-­of-pocket spending (OOPS) on health per capita, after a decline in 2020, rose in 2021 in high, upper-­middle and lower-­middle income countries, to return to prepandemic lev- els. Once again, the exception was in low income countries, where OOPS fell in both 2020 and 2021. External aid was crucial in supporting government spending in 2021 in low and lower-­middle income countries. The sharpest rises in external aid were in lower-­middle income countries. Sustaining government health spending and external aid at 2021 levels may be challeng- ing given the deterioration in global economic conditions and the rise in debt-­servicing obligations. Responding to new demands: Spending by health care provider For most of the 50 countries analysed, spending per capita at all types of providers increased from 2019 to 2021, with the fastest growth among preventive care providers, such as public health institutions and disease control agencies. Spending at three types of providers­—­hospitals, ambulatory care providers and pharmacies­ —­accounted for most health spending in middle and high income countries in 2021. Spending at hospitals accounted for around 40% of total health spending on average, spending at ambu- latory care providers for 19%–24% and spending at pharmacies for 16%–23%. Spending on outpatient care and preventive care generally occurs across multiple provider types: outpatient services are provided mainly by hospitals and ambulatory care providers, while preventive care spending is split mainly among preventive care providers, ambulatory care providers and hospitals. Ambulatory care providers and hospitals play a much larger vi  Key messages vii role in preventive care spending in middle income countries (combined share of 36% in 2021) and high income countries (37%) than in low income countries (19%). The composition of services within provider types shifted from 2019 to 2021, most likely reflecting the adaptation of service delivery during the pandemic. Hospitals pivoted away from outpatient care towards inpatient care, while preventive activities generally increased as a share of spending at hospitals and ambulatory care providers­—­and even at pharmacies in some countries. Balancing priorities: ­­COVID-­19 and other disease spending In 2021, COVID-­ ­­ 19 health spending rose in real terms in 39 of 48 countries with data; COVID-­ ­­ 19 health spending accounted for 11% of government and compulsory insurance health spending in 2021, up from 7% in 2020. ­­COVID-­19 vaccination changed the structure of COVID-­ ­­ 19 health spending by type of service in 2021, although spending on testing and treatment also rose substantially in middle and high income countries. In 18 low and lower-­middle income countries with fully disaggregated data by disease for 2019 and 2020, C ­ OVID-­19 health spending did not appear to reduce spending on other diseases in 2020. Overall health spending rose largely because of spending on ­COVID-­19, with a marginal increase in spending on other major disease categories. Building for the future: Health capital investment Health capital investment played an important role in the ­COVID-­19 response. In 64 coun- tries with data, capital investment increased in all income groups during the pandemic, to the equivalent of 5.2% of current health spending, or 0.4% of GDP. The fastest growth in health capital investment during the pandemic was in low and lower-­middle income countries. Across all income groups, hospitals were the health provider with the highest investment during the pandemic, accounting for 66% of investment in high income countries and slightly more than 50% in low and middle income countries. Ambulatory care providers received 6%–19% of investment across income groups. In low income countries, there was a surge in the acquisition of machinery and equipment. In high and middle income countries, the distribution of investment­—­for buildings and struc- tures, machinery and equipment, and software and database­s—­changed little. Government played the main role in funding health capital investment in high and middle income countries, accounting for more than 75% of investment during the pandemic. In low income countries, government and external aid each accounted for around 50%. © WHO / NOOR / Bénédicte Kurzen O V E R V IE W Global spending on health: coping with the pandemic The 2023 Global Health Expenditure Report lower-­middle income countries, it reflected focuses on health spending in 2021, the sec- mainly an overall increase in general gov- ond year of the C ­ OVID-­19 pandemic. Following ernment spending. In low income coun- massive disruptions to health systems, econ- tries, where government health spending omies and societies with the onset of the pan- fell in 2021, external aid for health played an demic in 2020, 2021 ushered in a critical new essential supporting role. However, lower-­ phase as C ­ OVID-­19 infections and deaths rose middle income countries received the larg- sharply. Yet 2021 was also a period of adap- est increases in external aid. In most income tation, as economies slowly recovered from groups, out-­ of-pocket spending on health the sharp downturn in 2020 and new C ­ OVID-­19 recovered in 2021 following a decline in 2020, vaccines were rolled out. as economies recovered and the provision and The two years of data now available for the use of routine health services improved com- ­COVID-­19 pandemic period offer new insights pared with 2020 but did not yet return to nor- into the evolution of global spending on health mal conditions. Once again, the exception was through this tumultuous period. Global spend- in low income countries, where out-­of-pocket ing on health continued to rise in 2021, reach- spending fell in both 2020 and 2021. ing a new high of US$ 9.8 trillion, or 10.3% of The 2023 report also draws on dis­ global gross domestic product (GDP). Health aggregated spending data by health ser- spending per capita rose in 2021 for all income vice providers to reveal some of the ways groups except low income countries, although that health service delivery systems adapted the growth rate was lower than in 2020. to the C­ OVID-­19 pandemic. Spending at hos- Together with generally strong growth in pitals, ambulatory care providers and phar- health spending in 2020, rising average health macies accounted for most health spending spending per capita in 2021 reached 11%–12% across all income groups. Shifts occurred, above its prepandemic level in real terms in however, in the composition of services within high, upper-­middle and lower-­middle income provider type during the pandemic. Hospitals groups and about 5% above its prepandemic generally pivoted away from outpatient care level in low income countries. towards inpatient care, most likely reflect- Notably, for most income groups, the ing a shift in priorities towards the most acute growth in health spending in 2021 was under- and pressing treatment needs. Additionally, pinned by a sharp budgetary response from spending on preventive care increased rap- domestic government spending. In high and idly during the pandemic. This was reflected upper-­middle income countries, this reflected in the rising share of spending on preventive a sharply higher prioritization of health care providers­—­such as public health insti- within government budgets. In contrast, in tutions and disease control agencies­—­in total ix x Global spending on health: coping with the pandemic health spending for all income groups. It also changed little. Hospitals received over half of reflected the rising share of preventive care all reported health investment in all income spending at hospitals and ambulatory care groups during the pandemic. As with cur- providers in most countries and at pharma- rent health spending, government spending cies in some countries. This pattern of health was a major driver of the rise in health capital spending is consistent with the widespread investment during the pandemic. The excep- distribution of testing, contact tracing and tion, once again, was low income countries, ­COVID-­19 vaccination across locations and the where government and external health aid adaptation of service delivery systems to the had critical complementary roles in bolster- changed context. ing investment. There was no evidence that the additional Notably, the C ­ OVID-­19 pandemic period health spending on ­COVID-­19-related activ- is unlikely to represent a “new normal” for ities led to lower spending on other commu- government health spending. During the nicable diseases (such as HIV, tuberculosis pandemic, the strong government budget- and malaria) or noncommunicable diseases ary response and increased aid flows to low in low and lower-­middle income countries. and lower-­ m iddle income countries were Moreover, the introduction of vaccines­did not prompted by rapidly evolving political agen- result in lower spending on testing and treat- das that placed public health and emergency ment for ­COVID-19. On the contrary, spending response at the forefront of decisionmaking. on testing and treatment rose substantially in Sustaining government spending at 2021 most upper-­middle and high income countries levels could, therefore, be challenging for with data. Thus, the analysis suggests that many countries; this is especially true given the increased spending for C ­ OVID-­19 did not the deterioration in global economic condi- crowd out spending for other health needs, tions, with slowing growth and inflation at a although it might have affected the rate of multidecade high. Further, increased debt growth of spending for these other purposes. servicing obligations associated with rising A further novel aspect of this year’s Global indebtedness and tightening financial condi- Health Expenditure Report is that it examines tions will likely narrow governments’ budget- health capital investment. In contrast to cur- ary space. rent health spending, which involves the day-­ Amid this more difficult financing environ- to-day consumption of existing resources, ment, a key challenge for countries will be investment creates new assets, such as build- to resist the urge to deprioritize government ings, equipment and intellectual property (for spending on health. Doing so risks rolling back example, computer software, databases), progress towards universal health coverage. which are essential to the proper function- That has been a central part of the effort to ing of health service delivery systems now get back on track to achieve the Sustaina- and into the future. Specifically excluded from ble Development Goals following the severe the analysis is investment in research and ­COVID-­19 pandemic–related disruptions (1,2). development of vaccines, which lie beyond Government spending is also essential for the scope of health accounts despite their building health systems and capacities to undoubted importance during the ­C OVID-­19 respond to future pandemics (3). pandemic. Also excluded is supranational Action is also needed at the domestic investment made at the regional or global and international levels to monitor spend- level, given the focus of health accounts on ing patterns and inform global and national tracking spending that can be assigned to decisionmaking. Data availability remains a individual countries. major challenge for tracking health spend- Investment in health service delivery sys- ing. While most countries regularly report tems was essential to the ­COVID-­19 response. aggregated health spending data, few consist- Investment increased across all income ently report the critical details that underpin groups compared with prepandemic levels, these high-­level results. Accordingly, only a equivalent to more than 5% of current health partial view of the spending dynamics during spending, or about 0.4% of GDP. Low income the ­C OVID-­19 pandemic­—­by provider, func- countries experienced a surge in spending on tion, and disease and condition­—­is possible in machinery and equipment, possibly reflect- this report. Similarly, few countries regularly ing a lack of essential equipment­—­such as report health capital investment, which lim- ventilators and hospital beds­—­at the begin- its the insights into this critical area of health ning of the pandemic. In high and middle policy. income countries, the structure of investment  Overview xi More effort is needed, therefore, to improve References data collection and increase the number of countries developing and reporting disaggre- 1. Martín-­Blanco C, Zamorano M, Lizárraga C, Molina-­ gated health account data. Key to this is insti- Moreno V. The Impact of C ­ OVID-­19 on the Sus- tutionalizing health account practices at the tainable Development Goals: Achievements and country level, in line with the global standard Expectations. Int J Environ Res Public Health. 2022 for the System of Health Accounts framework. Dec 5;19(23):16266. doi: 10.3390/ijerph192316266. The more institutionalized that health accounts PMID: 36498340; PMCID: PMC9739062. are within countries, the better-­equipped are 2. United Nations. The Sustainable Development Goals ministries of health and others to evaluate Report 2022. United Nations Publications, New York; health system performance and adjust pol- 2022. (https://unstats.un.org/sdgs/report/2022/). icy and programmes to improve performance. 3. OECD. Ready for the Next Crisis? Investing in Health By shedding new light on how the dimensions System Resilience. OECD Health Policy Studies. of health accounts can be analysed for health OECD Publishing, Paris; 2023. (https://doi.org/10​ policy, the intention is that this report can spur.1787/1e53cf80-en). new demands for information and improve- ment in data collection and reporting. © WHO / NOOR / Sebastian Liste  1 Higher global spending on health during the pandemic Key messages After a surge in 2020 during the first year of the ­­COVID-­19 pandemic, global spend- ing on health rose again in 2021, to US$ 9.8 trillion, or 10.3% of global gross domes- tic product (GDP). Average health spending per capita increased in all income groups except low income countries, where it fell. In most income groups, growth in health spending in 2021 was underpinned by a sharp budgetary response from governments. In high and upper-­middle income countries, this reflected a sharply higher prioritization of health within government budgets, while in lower-­middle income countries, it reflected mainly an overall increase in general government spending. Average out-of-pocket spending (OOPS) on health per capita, after a decline in 2020, rose in 2021 in high, upper-middle and lower-middle income countries, to return to prepandemic levels. Once again, the exception was in low income countries, where OOPS fell in both 2020 and 2021. External aid was crucial in supporting government spending in 2021 in low and lower-­ middle income countries. The sharpest rises in external aid were in lower-­middle income countries. Sustaining government health spending and external aid at 2021 levels may be chal- lenging given the deterioration in global economic conditions and the rise in debt-­ servicing obligations. 1 2 Global spending on health: coping with the pandemic Like 2020, 2021 was dominated by the effects FIGURE 1.1 Global spending on health of the COVID-­ ­­ 19 pandemic and the associ- reached US$ 9.8 trillion in 2021 ated global response. Yet 2021 marked a new Global spending on health, 2021 phase of the pandemic, bringing fresh chal- US$ 9.8 trillion lenges for the world’s health systems and Government economies. The emergence of more trans- US$ 6.2 trillion missible variants of concern, such as the (62.9%) Delta variant (B.1.617.2) early in the year and the Omicron variant (B.1.1.529) later on, led to a step-­change in the number of ­­COVID-­19 infections worldwide and broader geographic reach of the virus (1). It also meant that Private US$ 3.6 trillion ­­COVID-19 deaths were higher in 2021 than in (38.6%) 2020. Notably, 2021 was also the first full year of COVID-­19 vaccinations, with mass vaccina- tion programmes rolled out simultaneously in External many countries. Critically, in 2021, economic US$ 26 billion (0.3%) activity also began recovering in all income groups following the 2020 global recession. Note: Data are the sum of total health spending in US dollars The rebound generally fuelled an upturn in across 188 countries. The conversion from national currency units to US dollars is based on country-­specific exchange rates private sector income and boosted govern- in 2021. ment revenue. However, the fiscal response Data source: WHO Global Health Expenditure Database, 2023. in both 2020 and 2021 and the adaptation of economies to the realities of the C ­ OVID-­19 pandemic differed by income group, with spending accounted for higher overall health implications for health spending (2). spending, as private spending fell. Aggregate global spending on health The distribution of global spending on health remained highly skewed in 2021: 79% was in After surging during the first year of the high income countries,3 which are home to COVID-­ ­­ 19 pandemic, global spending on less than 16% of the world population.4 This health1 reached US$ 9.8 trillion in 2021, or high proportion of global spending on health, 10.3% of global GDP (Figure 1.1).2 Based on the which is roughly the same as in 2020, com- latest data from 188 countries (Box 1.1; see the pares with 16.5% in upper-­middle income Annex for the list of countries), global spend- countries, 3.8% in lower-­middle income coun- ing on health was slightly higher in 2021 than tries and just 0.2% in low income countries in 2020 (US$ 9.6 trillion in 2021 prices), but as (Figure 1.2). Average health spending per a share of global GDP, it was slightly lower in capita in 2021 was US$ 4 001 in high income 2021 than in 2020 (10.8%) because of the return countries, which is 8 times the US$ 531 in to economic growth. The rise in overall health upper-­ m iddle income countries, 27 times spending in 2021 was driven by higher spending the US$ 146 in lower-­middle income coun- by both governments and private sources­—­in tries and 89 times the US$ 45 in low income contrast to 2020, when growth in government countries. 1. The terms “health spending” and “total health spending” in this report are used synonymously with “current health expenditure.” Capital expenditure on health is not included but is discussed separately in chapter 4. 2. The data in Figures 1.1 and 1.2 and the accompanying discussion are the sum of total health spending in US dollars across 188 countries. The conversion from national currency units to US dollars is based on the exchange rate in 2021. The statistics in the rest of the chapter are unweighted cross-­country averages (for example, the average of government health spending per capita in low income countries). 3. Income groups in this report correspond to the classification of countries by World Bank for the year 2021. The World Bank did not calculate an income group classification for the Bolivarian Republic of Venezuela in 2020. It is classified as lower-­middle income country in this report based on estimates of gross national income and GDP per capita in 2021. 4. The extreme inequality of heath spending is underpinned by the United States, which accounts for 41% of spending yet has 4% of the world’s population. However, even excluding the United States, global spending on health remains highly unequal, with 38% of spending in high income countries, which are home to 11% of the world’s (non-­US) population.  Higher global spending on health during the pandemic 3 BOX 1.1 Health spending data sources Data on health spending for this report are collected and estimations were based mainly on budget information. validated annually from WHO Member States (countries) If no information is available, the estimation assumes for the Global Health Expenditure Database (GHED) up the same share of health spending in total government to t–2 (2021 is the latest year for GHED update in 2023), spending as in the previous year. except for a small set of countries reporting preliminary External aid. When a country does not report on exter- data on 2022. Data reported by countries identify health nal aid spending, disbursement amounts from donor financing flows using the international health account- reports are used. The main source for donor reports is ing framework, the System of Health Accounts 2011 the Organisation for Economic Co-­operation and Devel- (SHA 2011). opment’s Creditor Reporting System database, which Depending on the context, health accounts teams includes disbursements for current expenditures and compile information on health spending from several for capital investments. Because the database does not data sources, including countries’ national accounts, report actual expenditures, estimates use a one-­year non-­SHA health accounts, government records (such as lag to account for recipient capacities to absorb and ministry of health budgetary information and regional consume the funds received. government data) and social security data. This informa- tion is complemented with other data and metadata from Out-­of-pocket spending. When a country does not report dedicated surveys (for example, of facilities and house- household out-­ of-pocket spending, the estimation holds), insurance umbrella organizations, trade associ- assumes the same share of health spending in total pri- ations and nongovernmental organization accounts (3). vate final consumption as in the previous year. This chapter uses data on current health spending Other disaggregations of health spending for this report, organized by financing schemes and sources of funds such as current health expenditure by disease, health (SHA 2011 classifications HF and FS, respectively) col- care function and health care provider, and of invest- lected from countries. When information from a coun- ments on capital in the health system are only derived try was unavailable for specific financing schemes or from country-­reported data and are not estimated if no sources for t–2 (year 2021), the corresponding spending information is available. Therefore, detailed breakdowns was estimated by WHO (4). of health spending by service, provider and disease and Government spending on health. When a country had of capital expenditure are only for the sets of countries no reporting on government health spending, WHO with data indicated in each chapter of this report. FIGURE 1.2 Nearly 80 percent of total health spending was in high income countries in 2021 Income group Low Lower-middle Upper-middle High Global spending on health Global population 100 100 Share of total (%) 80 80 60 60 40 40 20 20 0 0 2000 2005 2010 2015 2021 2000 2005 2010 2015 2021 Data source: WHO Global Health Expenditure Database, 2023. Population data are from United Nations, World Population Prospects, 2022 revision. 4 Global spending on health: coping with the pandemic Progress in boosting health spending in Average health spending per capita rose resource-­s carce countries has been lim- in real terms from 2020 to 2021 across all ited, despite a commitment to leave no one income groups except low income coun- behind. In 2021, about 39% of the global pop- tries.6 Overall, increases in health spending ulation lived in countries that spent less than per capita were common, with around three-­ US$ 100 per capita on health in constant (2021) quarters of countries reporting a rise. How- values 5 ­—­an arbitrary but simple threshold ever, the change in health spending per capita of health spending (Figure 1.3). Notably, this in 2021 varied considerably and involved some share has changed little over time. In 2000, particularly large increases and decreases the share was about 42%. By 2015, the end of for individual countries (Figure 1.4). This the Millennium Development Goals (MDGs) was reflected in differences in the average period, it had improved slightly, to 39%, where growth rate of health spending per capita it has remained stable. Similarly, the share of across income groups. Growth was highest, the global population living in countries with on average, in lower-­middle income countries health spending per capita of less than US$ 50 (7.6%), outpacing upper-­middle (5.4%) and in constant values barely changed from 2012 high income countries (4.7%). The exception to 2021, remaining around 11%–13%. (The in 2021 was in low income countries, where large decrease in 2012 was the result of India average health spending per capita fell by passing the US$ 50 threshold, though India 1.6%. Indeed, nearly two-­thirds of low income remained below the US$ 100 threshold until countries recorded a drop in health spending 2021). In 2021, around 47% of the global pop- per capita in 2021. ulation lived in countries where health spend- ing per capita was below US$ 200 in constant In all income groups, average health spend- values, a proportion that has also remained ing per capita in 2021 was above prepan- largely unchanged since China passed the demic levels. In high, upper-­ m iddle and threshold in 2008. lower-­middle income countries, health spend- ing per capita in 2021 was around 11%–12% FIGURE 1.3 The share of the world’s population living in above the 2019 level in real terms. In low countries that spent less than US$ 100 per person on income countries, although health spending health in constant values has fallen only 3 percentage per capita fell in 2021, it was still around 5% points since 2000 above the prepandemic level due to the large Share of global population living in countries with health spending per capita increase in 2020. of less than: US$ 50 US$ 100 US$ 200 70 70 68 In all income groups, average health spend- Share of global population (%) 70 70 69 69 69 69 ing as a share of GDP in 2021 remained higher 60 China > US$ 200 than the prepandemic level, even as GDP 50 per capita from 2008 48 49 48 48 48 48 48 48 48 49 49 48 47 grew in 2021 (Figure 1.5 and Box 1.2). In high 48 42 43 43 43 43 44 44 44 44 44 42 42 42 42 income countries, average health spending 39 39 39 39 as a share of GDP was around 9% in 2020 and 38 39 39 39 40 38 37 37 35 35 31 31 32 31 31 31 31 2021, up from 8.2% in 2019. In upper-­middle 30 India > US$ 50 income countries, health spending as a share per capita from 2012 20 of GDP remained steady, at a bit above 7% in 13 13 13 12 12 12 12 10 10 11 2020 and 2021, up from 6.5% in 2019. In lower-­ 10 middle income countries, average health 0 spending as a share of GDP rose from 4.8% in 2000 2005 2010 2015 2021 2019 to 5.1% in 2020 and to 5.4% in 2021. In low Note: Thresholds of health spending per capita are based on constant (2021) income countries, health spending as a share values. of GDP rose from 6.2% in 2019 to 6.9% in 2020 Data source: WHO Global Health Expenditure Database, 2023. and remained stable at 6.9% in 2021.7 5. Throughout this chapter and the report, the reference year for constant values is 2021; the terms “constant values” and “real terms” are used interchangeably in the report. 6. Group averages in this chapter exclude countries with fewer than 600 000 people in 2021. Population data used in the report are from United Nations, World Population Prospects, 2022 revision. 7. The stability of average health spending as a share of GDP in low income countries in 2020 and 2021 at 6.9% masks the decreases in 17 of 24 low income countries in 2021. The low income country average is influenced by Afghanistan, where health spending as a share of GDP rose sharply in 2021, by 6.3 percentage points, from 15.5% in 2020 to 21.9%, due to lower GDP and higher health spending (mainly out-­of-pocket spending, which was possibly overestimated). Excluding Afghanistan, average health spending as a share of GDP in low income countries fell from 6.6% in 2020 to 6.3% in 2021.  Higher global spending on health during the pandemic 5 FIGURE 1.4 Year-­to-year growth of health spending per capita varied across income groups in 2020 and 2021 Low income Lower-middle income Upper-middle income High income 60 Year-to-year growth of health spending (%) 40 20 0 –20 –40 2020 2021 2020 2021 2020 2021 2020 2021 Note: Each coloured dot represents one country, and the white circle is the mean. The vertical lines from the bars extend to the maximum and minimum values. The boxplots show the interquartile range (25th–75th percentile) of values; where the darkness of the bar changes is the median. Liberia, where health spending nearly doubled in 2020, is excluded from the graph for better visualization. Growth rates are based on per capita values in constant (2021) national currency units. Country-­specific GDP deflators were used to convert current values to constant values. Data source: WHO Global Health Expenditure Database, 2023. FIGURE 1.5 Health spending as a share of GDP remained higher in 2021 than before the C ­ OVID-­19 pandemic 9 High income Health spending as a share of GDP (%) 8 Upper-middle income 7 6 Low income 5 Lower-middle income 4 2000 2005 2010 2015 2021 Data source: WHO Global Health Expenditure Database, 2023. 6 Global spending on health: coping with the pandemic BOX 1.2 Macro-­fiscal developments in 2020 and 2021 Among the most notable features of the macroeconomic income groups, there was a sharp economic contrac- fluctuations during the first two years of the ­COVID-­19 tion in 2020 followed by a return to growth in 2021 (Box pandemic was the similarity of the pattern: across all Figure 1a). BOX FIGURE 1 Despite a similar pattern of GDP growth across income groups in 2020 and 2021, fiscal responses were more diverse a. Distribution of GDP growth b. Distribution of general government spending growth Low income 2021 Low income 2021 Lower-middle Lower-middle income 2021 income 2021 Upper-middle Upper-middle income 2021 income 2021 High income 2021 High income 2021 Low income 2020 Low income 2020 Lower-middle Lower-middle income 2020 income 2020 Upper-middle Upper-middle income 2020 income 2020 High income 2020 High income 2020 −20 0 20 −50 0 50 Year-to-year growth (%) Year-to-year growth (%) Note: Guyana (where GDP grew by more than 40% in 2020), Lebanon (where GDP decreased by more than 50% in 2021), the Bolivarian Republic of Venezuela (where government spending decreased by more than 60% in 2020) and Zimbabwe (where government spending increased by more than 75% in 2021) are excluded for better visualization of the graphs. Growth rates are based on per capita values in constant (2021) national cur- rency units. Country-­specific GDP deflators were used to convert current values to constant values. Data source: WHO Global Health Expenditure Database, 2023, based on data from Eurostat, the International Monetary Fund, the Organisation for Economic Co-­operation and Development, the United Nations Economic Commission for Europe, the United Nations Population Division, the United Nations Statistics Division and the World Bank. (continued)  Higher global spending on health during the pandemic 7 BOX 1.2 (continued) The initial fiscal response also had a common pat- BOX FIGURE 2 General government spending as a tern: general government spending increased markedly share of GDP was high by historical standards during across all income groups in 2020. The initial counter- the C ­ OVID-­19 pandemic across all income groups cyclical fiscal response was largest in high income coun- 50 General government spending as a share of GDP (%) tries, potentially reflecting the early pattern of infections 45 and these countries’ greater budgetary flexibility to adapt High income to changing circumstances, though there was considera- 40 ble variation among countries (Box Figure 1b). 35 Upper-middle income In 2021, the patterns of government spending differed between income groups. High and upper-­middle income 30 countries wound back some of the fiscal stimulus from Lower-middle income 25 2020, evidenced by a drop in average general govern- Low income ment spending. The result: government spending as a 20 share of GDP in these economies fell, though it was still 15 high by historical standards (Box Figure 2). In contrast, 2000 2005 2010 2015 2021 in both low and lower-­middle income countries, average Data source: WHO Global Health Expenditure Database, 2023, based on data from Eurostat, the International Monetary Fund, the Organisa- government spending continued to rise, though less than tion for Economic Co-­operation and Development, the United Nations in 2020. The result: government spending as a share of Economic Commission for Europe, the United Nations Population Divi- GDP in these economies remained stable in 2021. sion, the United Nations Statistics Division and the World Bank. Government spending on health from Across all income groups, government domestic sources spending on health grew faster, in gen- eral, during the ­C OVID-­19 pandemic than Government spending on health8 continued during the MDGs period and the period to rise in most income groups in 2021, though between the adoption of the Sustainable by less than in 2020. Building on the strong Development Goals (SDGs) and the pan- response in the first year of the ­COVID-­19 pan- demic (from 2015 to 2019). The compound demic, government spending on health rose annual growth rate9 in government spend- from 2020 to 2021, increasing in approximately ing on health across the first two years of two-­thirds of countries. As a result, govern- the pandemic was within a tight band across ment spending on health per capita increased income groups (medians between 5%–8%; in real terms in 2021 by 5.8% on average red bar in Figure 1.7). In all income groups, in high income countries (to US$ 2 923), by this represented a rapid acceleration of gov- 4.3% in upper-­middle income countries (to ernment spending from the median annual US$ 298) and by 3.4% in lower-­middle income growth rate from 2015 to 2019, which itself countries (to US$ 68) (Figure 1.6). In each was a deceleration from the preceding 15 case, this was less than the average growth in years.10 This relative lull in growth in global 2020. Once again, low income countries were government spending on health from 2015 to the exception: average government spending 2019, compounded by the severe disruptions on health per capita declined by 3.1% in 2021 in essential service delivery brought about (to US$ 10). Nearly half of low income coun- by the pandemic, might partly explain why tries reported a drop in government spending progress towards the health SDGs is esti- in 2021, though several large outliers in 2020 mated to be proceeding at only a quarter of and 2021 affected the average. the necessary pace (5). 8. Throughout this report, government spending on health refers to spending from domestic sources. It excludes external aid that is channelled through the government. 9. The compound annual growth rate presented in Figure 1.7 is a measure of the annualized growth for the analysed variable in each respective period. 10. Comparisons of government spending on health during the C ­ OVID-­19 pandemic with the MDGs and SDGs periods are most pertinent for low and lower-­middle income countries. However, the broad trend of a dip in growth during 2016–2019 was observed across all income groups. 8 Global spending on health: coping with the pandemic FIGURE 1.6 Average government spending on health per capita increased in real terms for all income groups except low income countries in 2021 Low income Lower-middle income Upper-middle income High income Year-to-year growth of government spending on health (%) 150 100 50 0 –50 2020 2021 2020 2021 2020 2021 2020 2021 Note: Each coloured dot represents one country, and the white circle is the mean. The vertical lines from the bars extend to the maximum and minimum values. The boxplots show the interquartile range (25th–75th percentile) of values; where the darkness of the bar changes is the median. Growth rates are based on per capita values in constant 2021 national currency units. Country-­specific GDP deflators were used to convert current values to constant values. Data source: WHO Global Health Expenditure Database, 2023. FIGURE 1.7 Government spending on health grew faster government budget. Income groups had dif- during the ­COVID-­19 pandemic than during the Millennium ferent patterns of growth in total government Development Goals period and between the adoption of spending in 2021 (see Box 1.2). But in most the Sustainable Development Goals and the pandemic high and upper-­ middle income countries, 8 where governments scaled back fiscal stimu- Median compound annual growth of government spending on health (%) 2000–2015 7.4 7.1 lus measures, government spending on health 2015–2019 2019–2021 increased­—­this appeared in part to be related 6 5.8 to the introduction of ­COVID-­19 vaccines, though 5.0 4.8 spending on ­COVID-­19 testing and treatment 4.3 activities also appeared to increase sharply 4 (see chapter 3). As a result, health priority rose 3.2 3.2 2.8 2.7 substantially in 2021. In each case, government spending on health as a share of general gov- 2.3 2 ernment spending climbed about 1 percentage 0.6 point­—­to 15.5% in high income countries and 0 13.0% in upper-­middle income countries, their Low Lower-middle Upper-middle High highest levels since 2000 (Figure 1.8). Income group In lower-­middle income countries, where Note: Growth rates are based on per capita values in constant (2021) national cur- average government spending on health and rency units. Country-­specific GDP deflators were used to convert current values to constant values. The median is used rather than the mean to avoid the domination of average general government spending con- extreme values. tinued to rise in 2021, nearly half of countries Data source: WHO Global Health Expenditure Database, 2023. reported lower health priority. This decline typically occurred because growth in govern- Government spending on health as a share ment spending on health did not keep pace of total government spending reached a new with growth in general government spending. high in 2021 in all income groups except low But because of a few significant outliers, aver- income countries. The proportion of total gov- age health priority in lower-­middle income ernment spending that is allocated to health countries nonetheless rose 0.2 percentage is a proxy indicator of health priority in the point, to 8.4%.11 11. The median health priority in lower-­middle income countries also rose in 2021, by 0.5 percentage point, to 7.6%.  Higher global spending on health during the pandemic 9 FIGURE 1.8 Health priority continued to increase from 2020 to 2021 in high and middle income countries Growth index of general government spending (2000 = 100) (left axis) Health priority (government health spending as share of total government spending, %) (right axis) Low income Lower-middle income 250 20 250 20 Growth index of general government spending (2000 = 100) (bars) Health priority (%) (line) Growth index of general government spending (2000 = 100) (bars) Health priority (%) (line) 200 16 200 16 150 12 150 12 100 8 100 8 50 4 50 4 0 0 0 0 2000 2005 2010 2015 2021 2000 2005 2010 2015 2021 Upper-middle income High income 250 20 250 20 Growth index of general government spending (2000 = 100) (bars) Health priority (%) (line) Growth index of general government spending (2000 = 100) (bars) Health priority (%) (line) 200 16 200 16 150 12 150 12 100 8 100 8 50 4 50 4 0 0 0 0 2000 2005 2010 2015 2021 2000 2005 2010 2015 2021 Note: Growth indexes are based on per capita values in constant (2021) national currency units. Country-­specific GDP deflators were used to convert current values to constant values. Health priority refers to government spending on health as a share of general government spending. Data source: WHO Global Health Expenditure Database, 2023. Among low income countries, health pri- contributions declined to below prepandemic ority declined in half of countries as wide- levels. Taking a broader perspective, the com- spread reductions in government spending on bined contribution to health spending from health coincided with higher general govern- government budgets and social health insur- ment spending. On average, health priority fell ance contributions in 2021 reached nearly 0.3 percentage point in low income countries, 75% of total health spending in high income to 5.9%. countries and more than 55% in upper-­middle income countries. For both income groups, While the strong government budgetary this was among the highest combined share response to the C ­ OVID-­19 pandemic may for these financing sources, which have long prove temporary, it accelerated the contin- been trending upward. uous efforts towards prepaid and pooled In low and lower-­middle income countries, health financing (Figure 1.9). In high and the average share of total health spending upper-­middle income countries, the boost to from government transfers fell in 2021, after government spending on health in 2020 and rising in 2020. However, in both groups, gov- 2021 was driven by transfers from government ernment spending was bolstered by substan- domestic revenue.12 In both groups, govern- tially higher external funding in 2021. In low ment transfers (which include on-­budget and income countries, this increase brought the extrabudgetary funding) increased as a share share of total health spending derived from of total health spending, while the share of external funding to 31% in 2021, back to its health spending derived from social insurance post-­2015 trend, after a decline to 29% in 2020. 12. Total domestic general government health spending, which is what is discussed earlier in the chapter, is a combination of spending funded from government transfers and social health insurance contributions. 10 Global spending on health: coping with the pandemic FIGURE 1.9 Across all income groups, the share of out-­of-pocket spending in total health spending declined, while the share of government spending rose, supported by external spending in low and lower-­middle income countries Government transfers Social health insurance contributions External aid Voluntary prepayments Out-of-pocket spending Other Low income Lower-middle income 100 100 Share of total health spending (%) Share of total health spending (%) 80 80 60 60 40 40 20 20 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Upper-middle income High income 100 100 Share of total health spending (%) Share of total health spending (%) 80 80 60