Rights-based approaches Global overview: Selected performance indicators
14 Universal Health Protection
Figure 3.4. Health expenditure as a percentage of GDP, selected countries, 2012
Source: ILO, based on WHO Global Health Observatory, 2014.
The level of wealth measured through a country’s GDP is closely related to its overall level of health spending. Figure 3.5 shows this positive correlation: the higher per capita GDP,
the higher per capita expenditure on health. However, levels of health expenditure are not a fixed percentage of GDP levels: some countries with relatively low GDP manage to spend
considerably more on health care than others with an equal level of wealth, indicating that all countries to a certain extent have the freedom to choose their own levels of health
expenditure.
2 4
6 8
10 12
14 16
18 20
Congo India
Philippines Peru
Egypt Russian Federation
Zambia Colombia
Poland Kyrgyzstan
Namibia Afghanistan
South Africa Finland
Brazil Australia
Greece Japan
Netherlands United States
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Figure 3.5. Correlation between wealth and health expenditure, 2013
Source: ILO, based on WHO Global Health Observatory, and UN, UNDATA, 2013.
In most countries, health expenditure derives from various sources, including: general government revenues;
income-related contributions to social health insurance; risk-based premiums to private insurance funds; and
out-of-pocket OOP expenditures. ILO Recommendation No. 202 emphasizes solidarity in financing as a basic principle for
providing protection in health para. I. 3h. Fair financing mechanisms ensure that persons in need of health care will not experience hardship or an increased risk of poverty
due to the financial consequences of seeking care. A prerequisite for solidarity in financing is the use of pre-payment and risk-pooling mechanisms. Such mechanisms make use of
pre-paid funds from a large number of individuals to cover their expenditures in case of ill health as opposed to a situation in which each individual bears hisher own health-care
costs. It follows that financing mechanisms requiring excessive payments at the point of service delivery, such as OOP, do not comply with the principle of fairness. OOP include
direct payments to providers, such as user fees, co-payments or other direct payments for health services and goods. They also include indirect costs such as for transport to health-
care facilities. Generally, OOP are regressive in nature and frequently create a barrier to accessing health services by placing the financial burden on the individual.
Globally, however, OOP still constitute the largest source of expenditures for health care. When grouping countries by income, it is apparent that the share of OOP is highest in low-
income countries 49 per cent. On the other hand, in high-income countries only 14 per cent of health expenditure originates from OOP, while 40 per cent is derived from social
insurance see figure 3.6.
1000 2000
3000 4000
5000 6000
7000 8000
20000 40000
60000 80000
100000
T o
tal e
xp e
n id
tu re
o n
h e
al th
p e
r cap
it a
in U
S
Total GDP per capita in USD
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Figure 3.6. Expenditure on health, by financing agent and income level percentages
Source: WHO Global Health Observatory, 2013.
Although globally OOP remain high, some positive trends can be observed. Between 2001 and 2011, OOP as a percentage of total health expenditure decreased in all regions and
country income groups figure 3.7. At the same time, an increase in total health expenditure could be observed in all regions. Figure 3.8 demonstrates that the largest
average growth – an increase from 11.9 to 14.3 per cent – occurred in the Americas.
Figure 3.7. Development of OOP as a percentage of total health expenditure, by income level of country, 2001─11
Source: ILO based on WHO Global Health Observatory, 2013.
2 6
25 40
1 3
9 19
49 53
33 14
36 33
30 21
13 5
3 6
10 20
30 40
50 60
70 80
90 100
Low Lower-middle
Upper-middle High
Social insurance Private insurance
OOP General government revenues
Other private
10 20
30 40
50 60
70
2001 2002
2003 2004
2005 2006
2007 2008
2009 2010
2011 Low income
Lower middle income Upper middle income
High income