Strong Health Systems For All With Better Public Spending, Pg6

Key Highlights:

• Low- and Middle-Income Countries (LMICs) spend approximately half of the minimum benchmark for per capita public health, despite a narrowing GDP share gap with high-income countries.
• Development Assistance for Health (DAH), which peaked in 2021, has seen significant cuts, including 67% from the U.S., 39% from the U.K., 35% from France, and 12% from Germany.
• Global public debt reached $102 trillion in 2024, with developing countries paying $921 billion in net interest, severely straining national budgets for health.
• LMICs typically execute only 85%-90% of their allocated health budgets, indicating a deprioritization of health at the implementation stage.
• Funds are often misallocated towards curative care at secondary and tertiary levels, rather than prioritizing preventive and primary healthcare.

Detailed Insights:

• The health expenditure gap between LMICs and high-income countries, as a share of GDP, narrowed from 2.05 percentage points in 2000 to 1.68 percentage points in 2023.
• However, in per capita terms, the health spending gap between LMICs and high-income countries expanded more than threefold during the same period.
• The Organisation for Economic Co-operation and Development (OECD) projects that health funding could drop by up to 60% from its 2022 peak due to reduced DAH.
• Developing countries' public debt has grown twice as fast as advanced countries since 2010, limiting fiscal space for essential services like health.
• In India, a parliamentary panel found that only about two-thirds of the allocation for the health infrastructure mission was spent in 2024-25.
• Within India's National Health Mission (NHM), only 26% of the money earmarked for communicable and non-communicable disease programs was utilized in 2024-25.
• Public health money is most effectively spent on public goods such as infectious disease control, vaccination, and sanitation, where market failures are prevalent.
• Improving governance and operational efficiency, including reducing corruption and enhancing bureaucracy, significantly boosts the positive impact of public health spending.
• Effective public finance management, encompassing budget credibility and flexible cash disbursement, is crucial for efficient implementation of health budgets.

Key Concepts Involved:

• Universal Health Coverage (UHC): A system ensuring all people have access to quality health services without financial hardship.
• Development Assistance for Health (DAH): Financial aid provided by donor countries and organizations to support health programs in developing nations.
• Public Debt: The total amount of money owed by a government to its creditors, both domestic and international.
• Budget Execution: The process of implementing and spending funds according to the approved budget allocations.
• Preventive Healthcare: Measures taken to prevent diseases rather than curing them, such as vaccinations and sanitation.