Declining health spending risks SDG goals

(Source – The Hindu, International Edition – Page No. – 9)

Topic: GS2 – Social Justice – Health

Context

● Recent trends in government health spending across low-income and lower middle-income countries (LICs and LMICs) show a decline in health funding, particularly after the pandemic. ● A World Bank report highlights this worrying shift, which challenges the progress toward Sustainable Development Goals (SDGs) for health. ● India is also affected by these trends.

 

 

Study Overview:

• A World Bank study examines government health spending in 63 low-income countries (LICs) and lower middle-income countries (LMICs) between 2019 and 2023.
• It compares post-pandemic trends with pre-pandemic data from 2015 to 2019, focusing on the implications for achieving the Sustainable Development Goals (SDGs) related to health by 2030.
• The study reveals a concerning decline in health spending per capita in these countries, particularly as the deadline for SDGs approaches.

Pandemic Spending Surge and Subsequent Decline:

• There was an initial surge in government health spending during the pandemic in 2020.
• However, this spike was followed by a steady decline in health expenditures after the peak pandemic years.
• The reduction in health spending is now more permanent, reversing the pre-pandemic trend where health had gained a greater share in national budgets.
• This decline poses risks to achieving health-related SDG targets, especially in LICs and LMICs.

Modest Growth in Health Spending:

● From 2019 to 2023, government health spending per capita grew modestly. ● The average annual growth rate of health spending per capita was just 0.4% in low-income countries (LICs) and 0.9% in lower middle-income countries (LMICs) . ● This growth rate is significantly lower than the pre-pandemic period, where LICs saw a 4.2% growth and LMICs saw 2.4% growth from 2015 to 2019. ● The slowdown in health spending growth highlights the increasing strain on public health systems in these countries.

 

Declining Share of Health in Government Budgets:

• As general government expenditure grew faster than health spending, the share of government budgets allocated to health has decreased.
• In LICs, health spending as a share of total government expenditure dropped to 5.6% in 2023, a notable decline from its pandemic peak.
• LMICs saw a similar trend, with health spending as a share of the budget declining to 6.5% in 2023.
• These reductions reflect challenges in maintaining adequate funding for health while general government budgets remain largely stagnant or show modest growth.

Challenges Faced by LICs and LMICs:

• The decline in health spending per capita is particularly pronounced in LICs, where health funding has historically been low and highly dependent on external aid.
• In LMICs, while the decline is less severe, it still presents significant challenges in sustaining health improvements.
• Projections indicate that many countries, including India, are likely to experience further budget contractions from 2023 to 2029, which may require difficult trade-offs in funding priorities.

India’s Declining Health Spending:

• India is among the LMICs where government health spending has significantly decreased since its pandemic peak.
• Health’s share in the Indian budget dropped from over 2% during the pandemic to around 1.75–1.85% in subsequent years.
• This decline underscores the challenges India faces in maintaining its health budget allocation, particularly as the country grapples with increasing healthcare demands

Practice Question:  Discuss the impact of declining government health spending in low-income and lower middle-income countries on achieving health-related Sustainable Development Goals. How can countries like India address these challenges to ensure sustainable health financing? (250 Words /15 marks)