Healing Health Care Finances

4 Pages Posted: 7 Apr 2011

See all articles by Benedict Clements

Benedict Clements

International Monetary Fund (IMF) - African Department

David P. Coady

International Monetary Fund (IMF)

Baoping Shang

International Monetary Fund (IMF) - Fiscal Affairs Department

Justin Tyson

International Monetary Fund (IMF)

Date Written: March 10, 2011

Abstract

Health care presents a daunting fiscal challenge in both advanced and emerging economies. This paper examines public spending pressures in health care over the next several decades and provides recommendations for reform. Using a methodology that improves upon earlier studies, the paper finds that public health spending will rise by 3 percent of GDP over the next 20 years in advanced economies, and in emerging economies, by 1 percent. For advanced economies, the most promising reforms to contain the spending of growth in an efficient and equitable manner involve a mix of budget controls and efficiency-enhancing reforms, including the introduction of market mechanisms and public management reforms that strengthen incentives for the provision of cost-effective care. Simulations show that these reforms could significantly reduce the fiscal burden of health care over the next 20 years. For emerging economies, the expansion of health care coverage should be based on a package of the most essential health services to ensure fiscal sustainability.

Suggested Citation

Clements, Benedict and Coady, David P. and Shang, Baoping and Tyson, Justin, Healing Health Care Finances (March 10, 2011). Available at SSRN: https://ssrn.com/abstract=1758729 or http://dx.doi.org/10.2139/ssrn.1758729

Benedict Clements (Contact Author)

International Monetary Fund (IMF) - African Department ( email )

1700 19th Street, NW
Washington, DC 20431
United States

David P. Coady

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Baoping Shang

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

Justin Tyson

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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