Macro-Fiscal Implications of Health Care Reform in Advanced and Emerging Economies prepared by the Fiscal Affairs Department approved by Carlo Cottarelli published by IMF (12/2010).
“The issue of health care reform is a difficult one, involving complex trade-offs between policy goals (such as ensuring access and consistency with overall fiscal constraints). Preferences over the role of the state in the provision and financing of health care services vary significantly across countries. Many of these issues go beyond the scope of this paper, which focuses on the macro-fiscal implications of health care reform. Health care reform is critical for fiscal sustainability, given the magnitude of the spending increases in this area: since 1970, public health care spending has risen from 3 to 7 percent of GDP in the advanced economies, by far the most important driver of total public spending increases. In this context, this paper: (i) presents new projections for public health care spending in advanced and emerging economies, and (ii) discusses options to contain spending in an efficient and equitable manner.
At the core of the analysis are improved projections for health care spending trends that better take into account the features of the health care system in each country, as well as pressures arising from technological progress and aging. In the advanced economies, public health care spending is projected to rise by an additional 3 percentage points of GDP over the next 20 years and by 6½ percentage points over the next 40 years. In net present value terms, these spending increases would be close to 100 percent of GDP. In emerging economies, where fiscal pressures are less severe, public health outlays are projected to rise by 1 percentage point of GDP, but are more sizable in certain regions (such as Europe and Latin America)…”
