Fiscal space for Health in the Americas: is economic growth sufficient?

In 2014, the member countries of the Pan American Health Organization signed the Strategy for Universal Access to Health and Universal Health Coverage. In it, they committed to increasing public expenditure on health until reaching the benchmark of 6% of gross domestic product (GDP). The objective of this paper is to determine, for each country in the Region, whether they can reach this target through economic growth alone and, if so, how long it would take.

Using World Bank and World Health Organization data, elasticity of public health expenditure (PHE) with respect to GDP was estimated for each country. Real economic growth and International Monetary Fund projections for 2016-2021 were used to project the expenditure series and determine the year each country would reach 6% of GDP.

Six countries have already reached the 6% target. The Latin American and Caribbean countries that have achieved it are those that have single health systems, based on universal access and coverage. If current prioritization of PHE is maintained, three countries could reach the target in the next decade. Four more countries would reach it before mid-century, 10 in the second half of the century, and one would have to wait until the next century. Finally, 13 countries would never reach the proposed target.

This analysis demonstrates the limitations of economic growth as a source of fiscal space. Other sources will need to be tapped, such as increased tax collection, specific health taxes, and greater efficiency in public spending, which will require social and political dialogue in the countries regarding their commitment to universal health principles.