Health Care Financing Worldwide: An Overview

External assistance for health barely tops 1 percent of totalhealth spending in three of the six regions that the World Bankclassifies as low or middle income and is negligible in theworld total—so why treat it prominently when discussinghealth financing? One reason is that as of 2004, aid accountedfor 15 percent of health spending in sub-Saharan Africa, thepoorest and sickest region. Even with such assistance, spendingin Africa can’t buy an estimated basic package of care,and prospects for adequate funding are dim without still greaterincreases. This realization, together with increasing evidenceof health’s importance to development and the potentialfor large health gains at low cost, "have brought health anddevelopment issues to the top of the agenda," as George Schieber,Pablo Gottret, Lisa Fleisher, and Adam Leive of the World Bankput it. Overall, aid for health nearly doubled from 2000 to2005. Simultaneously, dissatisfaction with aid effectiveness,including health aid, is rampant among both donors and recipients.Christopher Lane and Amanda Glassman of the Brookings Institutiontake up innovations in how resources are raised, channeled,and ultimately used, including novel mechanisms for distributingaid or inducing private firms to provide what the poor of theworld need but can’t afford.

The issues of assuring efficiency and equity in aid are thesame as those discussed by William Hsiao in another paper inthis issue, and the question of the right amount to spend arisesfor aid just as for finance in general, as William Savedoff’spaper explains. To the extent that aid frees households fromthe risk of catastrophic or impoverishing expenses, as discussedin the papers by Ke Xu and colleagues and by Maureen Lewis,assistance for health is also an antipoverty measure, both directlyand indirectly.

Consensus exists on the need for more resources and better waysto apply them; after that, disagreement flourishes. Should donorscoordinate their efforts more closely, as Schieber and colleaguesbelieve? William Easterly’s The White Man’s Burden,reviewed in this issue, argues the contrary. Should donors financewhatever a recipient government says its priorities are? Orshould outside experts choose their own priorities and leaveit to recipients to adjust domestic budgets accordingly? Shouldaid concentrate, as it usually has, on particular diseases?Or does that retard or even undo the much-needed efforts toimprove how poor countries’ health systems work? And howshould donors deal with governments that are corrupt or apparentlyindifferent to whether aid actually improves health, caringonly about the net resource flows? None of these questions hasan easy answer, but they have become more urgent as more moneyis put at stake.

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Health Care Financing Worldwide: An Overview