Health financing: Who pays for equitable health systems?

October 24, 2012
Governance for Equity in Health Systems
Health Systems Insights

A birth, an accident, a serious illness – any one of these can spell financial ruin for those in poverty.  Researchers supported by IDRC are working with low- and middle-income countries to identify funding models that support health for all.

Countries rich and poor face difficult choices in funding quality health care for their citizens. Financing determines who can access care, what services are provided, and what costs are paid directly by users. For industrialized nations, some form of prepaid healthcare plan is the norm: their struggle today is to manage rising costs. Low-income countries, meanwhile, are striving to provide what others already enjoy: access to affordable and high-quality health services.
There are great disparities in global spending on health care. OECD countries spend an average of $US3,600 per person each year, while 31 member states of the World Health Organization pay less than $US35 per year, and four spend under $US10, even with donor aid. In some countries, more than 80% of health spending comes from patients’ own pockets despite evidence that user fees discourage the poor from seeking the care they need, and deepen the downward spiral of poverty. Most low- and middle-income countries rely on a mix of revenues – including public and private insurance payments, direct and indirect taxes, out-of-pocket payments, and donor aid – to finance their health systems. In these fragmented health systems, benefits and risks are unevenly shared. The poorest have less access to medical care and face a higher risk of “catastrophic” expenditure.
Addressing the finance challenge through research

For more than a decade, IDRC’s Governance for Equity in Health Systems (GEHS) program has been helping to build expertise in low- and middle-income countries so that health financing solutions reflect their needs and priorities.  Across multiple themes, research focuses on broadly strengthening health systems – improving access to and utilization of quality health services by addressing issues of governance, equity, and system integration.

In the area of health financing, GEHS-supported research teams are working with governments to identify financing options that widen access to quality health services and provide citizens with financial protection.  Research is documenting the impacts of out-of-pocket expenditures and proposing sustainable alternatives to user fees. Others are analyzing the impacts of various financing options, with a focus on how poor families are benefiting from services – or being excluded. And a growing network of Southern-based researchers is joining forces to share their findings and expertise across borders, and magnify their voice in informing global and regional debates.
Improving access to health services


Weighing taxation
vs. insurance


New insights into “catastrophic” expenditure





Building a global network for health equity



  • Read this article in PDF 


 More to explore: