Exploring the thresholds of health expenditure for protection against financial risk

Type Report
Title Exploring the thresholds of health expenditure for protection against financial risk
Publication (Day/Month/Year) 2010
URL http://www.who.int/healthsystems/topics/financing/healthreport/19THE-thresv2.pdf
Globally, 5.3 trillion dollars were devoted to health
care in 2007. However, resources available ranged
widely, from US$ 7439 in Luxembourg to US$ 7 in My
anmar. Global average health expenditure per
capita was US$ 800 (1). Although higher health expe
nditure does not necessarily lead to better health
outcomes, a minimum level of resources are needed fo
r a health system to fulfil its essential functions
adequately. In 2001, the Commission on Macroeconomic
s and Health concluded that US$ 34 per capita
on health is the minimum required for providing b
asic curative services to reach health related MDG
goals (2). More recent estimates are available fro
m the Taskforce on Innovative International Financing,
which found that on average US $ 44 per capita would be need to strengthen health systems as well as
provide essential services in 49 low-income countries in 2009. This amount would need to rise to US$60
per capita by 2015 (3).
Health expenditure reflects the government as we
ll as household capacity and willingness to spend on
health. Viewed as a share of GDP, total national health expenditure reflects the importance of health care
in the overall economy. Among high income countries,
the United States leads with health expenditure
representing 15.7% of GDP (1).
National health expenditure can also be separated
by public and private spending. Government
expenditure on health includes central and local gove
rnments' spending from general taxation, payroll
taxes as well as external funds channelled through
the government. Private health expenditure in most
countries is dominated by out-of-pocket payments.
The relative size of public and private spending,
particularly the out-of-pocket component, has a hug
e impact on financial risk protection and access to
care. Globally, out-of-pocket payments were 32% of total national health expenditure in 2007, with lower
income countries having much larger shares.

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