Fiscal Sustainability of Health Systems.

Format:

Book

Author/Creator:

OECD, author, issuing body.

Language:

English

Subjects (All):

Sustainable development.

Physical Description:

1 online resource (207 pages)

Edition:

1st ed.

Place of Publication:

Paris : Organization for Economic Cooperation & Development, 2024.

Summary:

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.

Contents:

Intro

Preface

Foreword

Executive summary

1 Financing resilient health systems in times of crisis: How finance and health authorities can find common policy solutions

1.1. Introduction

1.2. Countries face upward pressures on health spending, now and in the future

The pandemic demonstrated the need for additional spending to strengthen health system resilience…

…but finding sufficient additional funds for health in the current economic context is challenging

In the coming decades, OECD countries face a dual challenge of upward pressures on health spending and constraints on government revenues

1.3. Countries have four broad policy levers to finance more resilient health systems

Policy lever 1: Increase government spending and allocate part of these additional funds to health

Dependent on the state of public finance, more feasible in countries with low tax burdens and debt levels

Policy lever 2: Increase allocation to health within existing government budgets

Dependent on political priorities, but more viable in countries with relatively low allocations to health

Policy lever 3: Reassess the boundaries between public and private spending

While this option can free up government resources, it also entails major risks

Policy lever 4: Find greater efficiency gains

Can be a politically appealing solution, but requires bold reforms to deliver substantial cost-savings

These four policy levers are not mutually exclusive

1.4. Good budgeting practices facilitate a better dialogue between finance and health authorities on how to finance more resilient health systems

An effective budget process improves decisions on whether, when and by how much public funding for health can increase

An effective budget process improves how well the health budget is spent

1.5. Conclusions

References.

Notes

2 Examining the latest trends in health spending: Are we heading back to a time of austerity?

2.1. Introduction

2.2. Latest trends in health spending

After exceptional growth in 2020 and 2021, health spending dropped sharply in 2022 as OECD countries transitioned out of the pandemic

Public spending on health soared during the pandemic, before retreating in 2022

Governments picked up most of the additional spending during the pandemic

The pandemic did not change the share of the government budget for healthcare

Spending on prevention more than doubled during the pandemic

COVID-19 spending peaked in 2021, although such spending continued into 2022

2.3. Are countries on track to strengthen health systems?

Funds for more resilient health systems remain to be mobilised

After stripping out spending on COVID-19, health spending growth in 2022 remained below the pre-pandemic trend

The current economic and geo-political climate makes it challenging for countries to increase investment in health

The economic recovery is fragile and inflationary pressures remain

Inflation presents a huge burden to households with real wages falling

Elevated government debt levels continue to be a source of uncertainty

2.4. How are OECD countries facing the current challenges?

The legacy of the pandemic, plus higher energy and input costs continue to erode any budget increases…

…while the effects of the pandemic continue to be felt…

...with some countries expanding coverage to ease the cost-of-living crisis

High costs for energy and other inputs continue to exert pressure on providers

Better pay for health workers is crucial for job attractiveness but can weigh heavily on health budgets

More investment in resilient health systems or a return to austerity?

References

Notes.

3 Long-term projections: Different paths to fiscal sustainability of health systems

3.1. Introduction

3.2. Projecting health spending from public sources

3.2.1. Specifications of the health spending projection model

3.2.2. Projections and scenario analysis

3.3. Projecting government revenues

3.3.1. Estimating government revenues buoyancy coefficients

3.3.2. Scenarios for buoyancy

3.3.3. Estimating the impact of changes in the population age structure on government revenues

3.3.4. Age profiles

3.3.5. Combining the buoyancy and population age structure effects

3.3.6. Relevance of government revenue projections in countries where compulsory health insurance is the main financing source of health spending

3.4. Results

3.4.1. Projections of health spending from public sources to 2040

3.4.2. Projection of government revenues to 2040

Buoyancy effect on government revenues in 2040

The effect of population ageing on government revenues using NTA

3.4.3. Fiscal sustainability of health spending

3.4.4. The impact of changes in the size and structure of the population on health spending and government revenues

3.5. Conclusions

Notes

4 Budgeting practices for health in OECD countries

4.1. Introduction

4.2. Overview of health financing arrangements

4.3. Setting the budget for health

4.3.1. Budget allocation mechanisms

Formulation of the total budget for health expenditure

Political influence in the formulation of the total budget for health expenditure

4.3.2. Allocation of the health budget across categories/programmes

4.4. Budgetary tools used to control health expenditure growth

4.4.1. Spending controls and incentive mechanisms

4.4.2. Budget monitoring and reporting

4.4.3. Management of overspending in the health sector.

4.5. Multi-annual financial planning for health and capital budgeting

4.5.1. Multi-annual budget perspective

The benefits and challenges of integrating a multi-annual dimension into the budget process for health

Design issues when implementing multi-annual frameworks for health

4.5.2. Capital budgeting for health

4.6. Budgets and links to strategic health objectives

4.6.1. Programme and performance budgeting, and use of KPIs

4.6.2. Use of spending reviews for health

4.7. Conclusions

Annex 4.A. Budgeting practices for health in OECD countries: Country case studies

Budgeting Practices for Health in Belgium

Overview of health financing arrangements

Setting the budget for health

Budgetary tools used to control health expenditure growth

Multi-annual financing planning and capital budgeting for health

Links between the budgeting process and strategic health objectives

Budgeting Practices for Health in France

Budgeting Practices for Health in Israel

Budgeting Practices for Health in New Zealand

Multi-annual financial planning and capital budgeting.

Budgetary regulation of health expenditure and links to health objectives

Budgeting Practices for Health in the United Kingdom

Multi-annual financial planning and capital budgeting for health

Budgetary regulation of health expenditure and links to health objectives

5 Medium-term budgeting for health: Looking beyond the annual focus of the budget

5.1. Introduction and key policy findings

5.2. Strengthening the medium-term financing perspective for health

5.2.1. Estimating health expenditure beyond the current year

5.2.2. Capturing the main factors influencing health expenditure in future years

5.2.3. The importance of co-operation among different public institutions

5.2.4. From medium-term to longer-term projections

5.3. Improving the link between multi-annual budget plans and the budget process

5.3.1. Integrating health spending projections into annual budget documents

5.3.2. Medium-term budgeting for health as part of a broader medium-term expenditure framework

5.4. The benefits and challenges of medium-term budgeting

5.5. Conclusions

6 Programme and performance budgeting for health: Linking budgets to results

6.1. Introduction and key policy findings

6.1.1. Design and number of programme budgets:

6.1.2. Type of programmes used within budgets:

6.1.3. Control and accountability:

6.1.4. Links between programme and performance budgeting:

6.1.5. Need for buy-in from both health and finance policy makers:

6.2. Benefits and challenges to move towards programme and performance budgeting

6.2.1. Programme budgeting: Budget classifications and their implications for public spending.

6.2.2. Performance frameworks within programme-based budgets.

Notes:

Description based on publisher supplied metadata and other sources.

ISBN:

92-64-39487-7