Government spending on health per citizen slowed in 2022 – World Bank

Spending per citizen on healthcare lost steam in 2022 after most developing countries failed to sustain the momentum driven in the first two years of the Covid-19 pandemic, the World Bank has said.

A new study by the bank shows that real per capita health spending generally soared in 2020, growing on average across all countries by approximately 21 percent.

It surged to 25 percent in 2021, above 2019 levels. The increase was primarily driven by governments prioritising health in their spending.

However, the initial strong advance lost steam in an early retreat, as spending contracted on average from its peak of 25 percent to only 13 percent above the 2019 level, and close to its pre-pandemic trajectory.

“The reversal was even starker in the priority that governments gave to health. On average, the central health share in general government spending tumbled, from its maximum of 17 percent to only five percent above the 2019 baseline, falling back to its pre-pandemic trajectory,” the bank said in the study titled ‘Health Financing in a Time of Global Shocks’.

“Hence, it was no longer the prioritisation of health, but growth in general government spending that primarily helped bolster 2022 central government health spending (CGHS) above the 2019 level,” the World Bank said.

The study included 78 developing countries and considered their levels and shares in general government spending. It drew on data from nearly 2,000 budget documents.

The rapid decline of actual central government health spending may have been a risky and costly retreat. In 2022, as governments were grappling with new spending demands – due to energy and food price hikes, and rapidly rising debt service costs – the Omicron caused another wave of COVID-19 infections and death worldwide, and many health systems struggled to cope with the backlog of non-Covid-19 services.

The stark reversal in the priority given to health in government spending does not augur well for global health security and progress toward the health-related Sustainable Development Goals (SDGs), especially in countries where the macroeconomic outlook remains concerning, and the capacity to increase government spending is limited, the bank warned.

It said rapid action from governments will be necessary in many developing countries to reverse this latest trend and secure the prioritisation of health in government spending to put their countries and the world on a new, pandemic-proof, and sustainable development trajectory.

It further noted that compared with the 78 developing countries in this study, the 38-member Organization for Economic Cooperation and Development (OECD) countries had a slower government health spending response in 2020 that, however, intensified in 2021.

The growth in the OECD countries’ real per capita government health spending – which includes obligatory social health insurance – was on average 10 percent in 2020 relative to the 2019 level, much lower than the average increase of 21 percent in the real per capita central government health spending across the 78 countries.

However, real per capita government health spending further increased in OECD countries in 2021, and was, on average, 21 percent above the 2019 baseline, converging with the trend in average real per capita central government health spending growth among the countries included in this study.

In several of the 78 countries, sub-national governments use their own revenues to spend on health. CGHS generally did not include this spending; it only included conditional transfers for health spending from the central government. Information on sub-national government health spending from own revenues was limited.

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In the 43 countries reporting some subnational government health spending through their NHAs, the average share in total government health spending was 21.8 percent.

However, the share was high in several countries. For example, it was 82 percent in Uzbekistan, 85 percent in Angola, and over 95 percent in Pakistan.

Sub-national government health spending measured over 10 percent in 22 countries, ranged from five percent to 10 percent in five countries and was less than five percent in 16 countries.

In countries with a low share of subnational government health spending, CGHS trends are likely to reflect government health spending trends, especially considering that part of subnational government health spending is already reflected in CGHS.