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 Universal Health Protection 15 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 16 Universal Health Protection 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