Given the challenges faced by health systems, an effective dialogue across government agencies responsible for health outcomes is critical. To help facilitate this dialogue, the OECD Joint Network of Senior Budget and Health Officials brings together people from ministries of finance, health and social security agencies.
Over the years, the Network has provided an effective space for government officials to openly discuss challenges and solutions to the fiscal sustainability of health systems. Since 2015, this Network has expanded beyond OECD member countries, in partnership with the World Health Organization, The Global Fund and other international institutions. Regional networks exist in Asia, Central Eastern and South-Eastern Europe, and Latin America and the Caribbean.
Fiscal Sustainability of Health Systems - How to Finance More Resilient Health Systems When Money Is Tight?
Released January 11, 2024
Finding sufficient funds to pay for more resilient health systems is challenging in the current economic context. COVID-19 has shown the need for additional targeted spending on public health interventions, the digital transformation of health systems, and bolstering the health workforce. Rising incomes, technological innovation and changing demographics put further upward pressure on health spending. This could result in health spending reaching 11.8% of GDP across OECD counties by 2040.
This publication explores the policy options to finance more resilient health systems whilst maintaining fiscal sustainability. It finds that the scale of the additional health financing needs requires ambitious and transformative policy changes. Robust actions to encourage healthier populations and policies to reduce ineffective spending can put future health expenditure on a far gentler upward trajectory. These would enable spending to reach a more sustainable 10.6% of GDP in 2040.
Better budgetary governance is critical. It improves how public funds for health are determined, executed and evaluated. Therefore, a focus of this report is on how good budgeting practices can increase the efficiency of current public spending, and also enable more ambitious policy changes in the medium to longer-term. Findings of this report are targeted at health and finance policy makers, with improved dialogue between health and finance ministries especially important when governments are operating in a constrained fiscal setting.
THE FISCAL SUSTAINABILITY CHALLENGE FOR HEALTH
Health expenditure has typically outpaced economic growth. Latest OECD projections estimate the average annual change in health spending will be twice as high as the change in government revenues from 2023 to 2040
… and two percentage points higher than the potential GDP growth.
HOW TO ADDRESS THE FISCAL SUSTAINABILITY OF HEALTH SYSTEMS CHALLENGE?
The OECD Joint Network works across three pillars of health financing to address the fiscal sustainability of health systems challenge:
1. Resource mobilsation - the process through which countries raise funds to finance health services
MEETINGS OF the Joint Network
The meetings of the OECD Joint Network on Fiscal Sustainability of Health Systems provide a valuable space for health and finance officials to increase their understanding of policy responses at the intersection of health policy and public finance. The Joint Network holds annual meetings for OECD member countries in Paris and regional network meetings for members and non-members. The regional meetings are held in partnership with The Global Fund to Fight AIDS, Tuberculosis and Malaria, and the World Health Organization.
OECD member countries network:
KEY OUTPUTS AND PUBLICATIONS
Country case studies on health financing and budgeting practices for health:
Through the OECD Joint Network of Senior Budget and Health Officials, the OECD Secretariat provides expertise on health budgeting, expenditure and public management to help public sector officials improve the efficiency and effectiveness of health financing. In particular the Secretariat’s experts provide:
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