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Basic patterns in national health expenditure.

Philip Musgrove1, Riadh Zeramdini, Guy Carrin

  • 1The World Bank, Washington, DC 20433, USA. Pmusgrove@worldbank.org

Bulletin of the World Health Organization
|April 16, 2002
PubMed
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National health spending increases with income, but low-income countries have significant financial protection gaps. Out-of-pocket spending is high in poorer nations, leaving them vulnerable to health-related financial catastrophe.

Area of Science:

  • Health Economics
  • Public Health Policy
  • Global Health Financing

Background:

  • National health accounts data from 191 WHO Member States in 1997 were analyzed.
  • Spending on health and its financing sources were examined using comparisons and linear regressions.
  • Data included out-of-pocket, social insurance, government general revenue, and private insurance financing.

Purpose of the Study:

  • To describe health spending patterns across different income levels.
  • To analyze how health expenditure is financed globally.
  • To identify disparities in financial protection against health-related costs.

Main Methods:

  • Analysis of national health accounts estimates for 191 WHO Member States (1997).
  • Utilized simple comparisons and linear regressions to assess health spending and financing.

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  • Classified financing sources by completeness and reliability.

    • Main Results:

    • Total health spending as a percentage of GDP increases with income, from 2-3% in low-income to 8-9% in high-income countries.
    • Significant relative variation in health spending share and absolute amounts exists across countries, even within income groups.
    • Low-income countries show high and variable out-of-pocket spending (20-80%), with limited prepayment or risk-sharing, increasing financial catastrophe risk.
    • Public financing and its share of GDP increase with income, while private insurance remains marginal except in high-income nations.

    Conclusions:

    • Low-income countries are least protected from financial catastrophe due to high out-of-pocket health spending.
    • Public financing plays an increasing role in health expenditure as national income rises.
    • Despite increased public spending, disparities in financing mechanisms persist, and private insurance offers limited protection in poorer nations.