Strong health systems for all with better public spending
The discourse on building strong public health systems tends to start with financing. Indeed, according to the World Bank, the per capita public spending on
The discourse on building strong public health systems tends to start with financing. Indeed, according to the World Bank, the per capita public spending on universal health coverage in low- and middle-income countries (LMICs) — including government expenditure and off-budget development assistance — is about half of the minimum benchmarks. As a share of gross domestic product (GDP), the health expenditure gap between LMICs and high-income countries narrowed from 2.05 percentage points in 2000 to 1.68 percentage points in 2023. While it may seem that LMICs are “catching up”, recent World Health Organization data show that in per capita terms the gap has in fact expanded more than three-fold during this period. Health aid under pressure Over the years, “development assistance for health” (DAH) has played a critical role in supplementing national budgets in LMICs with the amount of such aid peaking in 2021 during the COVID-19 pandemic. However, the trend of increasing DAH reversed sharply post the pandemic. Further, in early 2025, the United States, a country that has historically contributed over a third of all DAH globally per year, announced cuts to the tune of 67% to its foreign assistance programme. The United Kingdom, France, and Germany followed suit, with cuts of 39%, 35%, and 12%, respectively. As per the Organisation for Economic Co-operation and Development (OECD), health funding could drop by up to 60% from its 2022 peak.
At the same time, national budgets are strained due to rising public debt and its costs. Global public debt reached a record figure of $102 trillion in 2024, with developing countries accounting for $31 trillion of this total. Since 2010, the public debt of developing countries has grown twice as fast as that of advanced countries. In 2024, according to UN Trade and Development (UNCTAD), developing countries paid a record $921 billion in net interest payments in public debt leaving less for other needs including health. With public sources drying up, it is unlikely that more money will flow into health systems anytime soon and the way forward may be to spend available money better. There are three broad ways to make public health spending go further. The first is to spend what is allocated. The World Bank reports that health budgets in LMICs are executed at around 85%-90%, rates that are lower than that for the general budget and for education. This effectively means that there is a deprioritisation of health at the implementation stage of budgets. In India, a parliamentary panel found that only about two-thirds of the allocation for the flagship health infrastructure mission was spent in 2024-25. Within the Health Mission (NHM), the picture is worse: just 26% of the money earmarked for communicable and non-communicable disease programmes was actually used that year. The right health investments The second is to spend on the right things.
The BriefWire