Tracking Health Expenditure On Covid 19 Within The System Of Health Accounts Framework

A System of Health Accounts 2011 provides a systematic description of the financial flows related to the consumption of health care goods and services. As demands for information increase and more countries implement and institutionalise health accounts according to the system, the data produced are expected to be more comparable, more detailed and more policy relevant. This publication summarises the System of Health Accounts 2011 (SHA 2011) Manual, which was jointly produced by OECD, the European Commission and WHO. The SHA 2011 Manual itself draws inspiration from and builds on the original manual, published in 2000, and the Gui de to Producing National Health Accounts (2003) to create a single global framework for producing health expenditure accounts that can help track resource flows from sources to uses. The manual is the result of a four-year collaborative effort between OECD, Eurostat and WHO, and sets out in more detail the boundaries, the definitions and the concepts responding to health care systems around the globe - from the simplest to the more complicated.

We estimate the additional health spending necessary to treat COVID-19 patients. We expand a Susceptible Infected Recovered model to project the number of people requiring hospitalization, use information about healthcare costs by country, and make assumptions about capacity constraints in the health sector. Without social distancing and lockdowns, countries would need to expand health systems ten-fold, on average, to assist all COVID-19 patients in need of hospitalization. Under capacity constraints, effective social distancing and quarantine reduce the additional health spending from a range of $0.6-1 trillion globally to $130-231 billion, and the fatality rate from 1.2 to 0.2 percent, on average.

The results of the report clearly show that in 2020, a year dominated by the emergence of COVID-19 and its associated health and economic crises, governments around the world rose to the challenge. Sharp increases in government spending on health at all country income levels underpinned the rise in health spending to a new high of US $9 trillion (approximately 11% of global GDP). Government health spending generally increased and offset declines in out-of-pocket spending. Importantly, the rise in government health spending was part of a much broader fiscal response to the pandemic. In high income and upper-middle income countries social protection spending also increased sharply in as governments attempted to cushion populations from the economic impacts of COVID-19. In contrast to health and social protection, growth in education spending was relatively subdued. Countries face the further challenge of sustaining increased public spending on health and other social sectors in the face of deteriorating macroeconomic conditions and rising debt servicing. This also includes the challenge of sustaining external support for low income countries, which is essential for reducing ensuring poverty, ensuring access to health services and strengthening pandemic preparedness.

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The report shows that global spending on health continued to increase in 2021, the second year of the pandemic, to US$ 9.8 trillion (10.3% of global GDP). The increase in spending was driven by higher government spending and out-of-pocket spending. In low income countries, external aid for health played an important role in supporting government spending. Sustaining government spending and external aid at 2021 levels could, however, prove challenging given the deterioration in global economic conditions, rising inflation and increased debt servicing obligations. The report also capitalizes on disaggregated spending information to provide new insights into the dynamics of increased global spending on health through the pandemic. Using data disaggregated by health service providers it shows some of the ways that health service delivery systems coped with the COVID-19 pandemic. Hospitals, ambulatory care providers, and pharmacies accounted for most health spending. Shifts were observed, however, in the composition of services within provider types, reflecting the new and evolving demands through the pandemic. Disaggregated spending data by disease and condition also shows a delicate balance between spending on COVID-19 and other diseases was maintained. The report also examines countries’ health capital investment, which shape current operational capacity and are essential for forging a path toward effective and resilient health systems.