World Bank: People Spend Half a Trillion Dollars Out-Of-Pocket on Health in Developing Countries Annually
TOKYO, Japan, June 27, 2019 -- People in developing countries spend half a trillion dollars annually — over $80 per person -- out of their own pockets to access health services, and such expenses hit the poor the hardest, according to a new report by the World Bank Group launched ahead of the G20 Summit. It says that lack of universal access to quality, affordable health services threatens decades-long progress on health, endangers countries’ long-term economic prospects, and makes them more vulnerable to pandemic risks.
Financing Universal Health Coverage (UHC) in developing countries is a priority for the G20 Presidency of Japan. The World Bank report will inform a first-ever G20 Finance and Health Ministers joint session hosted by Japan on June 28 in Osaka, after being discussed by G20 Finance Ministers earlier this month. Globally, health is an important economic sector that accounts for 11 percent of GDP and generates millions of jobs, many of them for women.
“UHC is not just about better health, it is fundamental to inclusive growth,” said Taro Aso, Finance Minister of Japan. “Japan’s adoption of a system that provided quality, affordable healthcare in 1961 helped drive decades of social and economic progress. We believe UHC is essential for all developing countries and the G20 has a critical role to play to enable it.”
The report, titled High-Performance Health Financing for Universal Health Coverage, projects that by the year 2030, the target date of the Sustainable Development Goals (SDGs), there will be a $176 billion gap in the 54 poorest countries between the financing needed to provide their populations with quality, affordable health services and funding that is actually available. Without urgent action, developing countries faced with aging populations and growing burdens of non-communicable diseases will find themselves increasingly challenged to close the gap between the demand for health spending and available public resources, and will prolong the reliance on out-of-pocket spending by patients and their families.
“Health is an essential human capital investment that countries must make for their people to succeed at school and at work,” said Kristalina Georgieva, CEO of the World Bank. “We must act urgently to fix the insufficient, inefficient, and inequitable financing of health that is holding back people and countries.”
The report calls for increases in national investments in health and making investment in health a whole-of-government priority, improving financial sustainability by scaling proven investments like primary health services that reach the poorest, and taxing tobacco, alcohol and sugary drinks to raise revenue and improve health. It says international assistance for health should be increased, focused on countries and populations that are furthest behind and on building national institutions and capacities.
“The African Union has made a commitment in February 2019 to increase national investments in health on the continent, and to institutionalize collaboration between Ministers of Finance and Health in Africa,” said Mohamed Maait, Minister of Finance of Egypt, which is currently chair of the African Union and invited to the G20 special Ministerial session in Osaka. “We welcome this G20 and World Bank Group initiative and intend to take this agenda forward at the regional level in Africa over the next year during Egypt’s Presidency of the AU.”
Even in the best-case scenario with greater, more efficient and more equitable country and international investments, the report projects that the 2030 UHC financing gap will not be closed. It urges that health financing therefore be a major priority for innovation over the next decade to help bridge the gap.