This post was revised and edited on 1st January 2025 and 1st July 2025.
Have you ever noticed that when conversations in global health get round to financing, there’s lots of talk about spending?
Here’s some of the phrases that you’ve probably heard:
- Total health spending.
- General government health expenditure.
- Government spending on healthcare as % of gross domestic product.
- Out of Pocket Payments.
- The costs of care.
- Global health expenditure.
- Household expenditures on health.
- Catastrophic health expenditures.
And so on.
At the same time, it is, and has been, tricky to persuade governments in low resourced systems to invest in publicly-provided healthcare.
And then there is the private sector. A huge multiverse of organizations and networks, driven by differing values and purposes: charities, social enterprises, for-profit enterprises across physical and digital healthcare facilities, constituting numerous lines of procurement (pharmaceuticals, medical devices, buildings, food, staffing, and more) to ensure delivery of care from those facilities.
There is a now an ever pressing need for government and private sector – even commercial enterprises – to do business in a way that achieves public health goals and ensures climate resilient, clean, and nature positive healthcare.
But how?
I think part of the problem is the way we talk about health and the stories we tell ourselves about healthcare.
We tell a story that healthcare is money out the door.
We talk about expenditure. Costs. Consumption.
And while this clearly happens, what about the other side of the coin?
Expenditure is only a part of the financing story. Let’s also talk about the yield of healthcare for health and economically. The value of healthcare for wellbeing and for the local and national economy.
Restricting financing to discussions on expenditure construes health systems as something passive, something which consumes money or financial value without actually generating any. This can put Ministries of Health on backfoot internally when dealing with their Ministry of Finance. Governments see healthcare as a drain on national budgets. It can mean that commercial healthcare seems to be playing a totally different game.
I argue that we should reframe the story we are telling. That in low resourced settings, healthcare can drive economic prosperity. Health systems are economies, and healthcare can be harnessed as an agent of economic development.
This framing makes it far easier to see points of entry into health system decarbonisation, climate adaptation, and biodiversity positive healthcare.
Healthcare Spending
One of the most common ways to describe (e.g. in documents, reports, slides, webinars, meetings, informal discussions) financing in global health starts with expenditure.
If you are reading this, you are likely familiar with the WHO Global Health Expenditure database and Health Financing dashboard [1] as well as statistics gathered by World Bank Open Data [2]. Open any research article on health financing, and expenditure will be up there at the start. I’ve done it too.
Many sources are largely talking to government – to public sector provision of healthcare services. And such attention is necessary because governments often say they do not have enough money to pay for the healthcare they would like to provide.
To dig into this a little more, let’s take a look at WHO’s The Health Financing Progress Matrix [3]. In this document, the word ‘expenditure’ turns up 83 times, ‘spending’ 82 times, ‘revenue’ 105 times ‘investment’ once, ‘profit’ 9 times, ‘profitability’ zero, ‘gross net margin’ zero and ‘cost’ 50 times. The document runs through policy & governance, revenue raising, pooling funds, purchasing and provider payments, insurance benefits and conditions of access, and public finance management.
The aim of the WHO financing assessment is to find out whether money and the way it moves through a health system is aligned with progress towards Universal Healthcare Coverage (UHC).
This looks like an accountant’s eye view of a situation. Your accountant wants to see your cash book, to account for the money that came in and went out. The accountant asks – do you have enough cash to pay for your expenses? how are you managing that cash flow? how are you making decisions on what to spend it on?
Clearly this is important. Good financial hygiene is definitely helpful when trying to stay financially afloat.
But its also tells a story that healthcare is a weight on the government budget…we have to be careful with the little money that we have…we aren’t sure where more money is coming from.
This story can reflect experience.
Government spending on health as a share of total government expenditure increased between 2000 and 2020 in upper-middle/high income countries and stagnated in low-middle income countries (LMICs). Public spending by LMICs on healthcare declined between 2000 and 2011, before partially rebounding and stabilising [4].
So here we have a story that health is a cost, and that in low resourced settings especially, government is spending less in publicly provided care while the private sector is equally important as the public sector in services provision.
But what’s really happening?
Create, Make, Generate
If you take a step back and pay attention to what is actually going on in health systems, it’s easy to see that health systems are economies in their own right.
Healthcare services and products are designed, developed, produced, manufactured, allocated, transported, consumed, disposed of, recycled, and wasted.
Innumerable relationships between people, organisations, equipment, infrastructure, buildings, beliefs, behaviours, narratives and much more work together over the short and long term generating ‘health systems’ as experienced today, right now.
Millions of people are busy building, checking, manufacturing, transporting, learning, teaching, creating, helping, testing, empathising, giving, receiving, changing, stabilising, and resisting.
Health systems are busy places – they are above all productive places – that produce physical things, social behaviours, cultural habits, biological health, and emotional and mental well-being.
And all of that is important. It’s important because it shows two things.
First, health systems are economically beneficial to a place, a region, and a country.
Second, health systems wield significant economic influence that can bring about economic and social change as well as health and wellbeing.
Public sector health facilities and long-lived private sector companies are like economic anchors:
“unlikely to relocate and have a significant stake in a geographical area… have sizable assets that can be used to support local community wealth building and development through procurement and spending power, workforce and training and buildings and land” [5 emphasis added].
Here are 3 of the ways that health systems anchor the economy, every day of every month of every year. Data taken from NHS England.
SALARIES
The National Health System of England contributed US$1.265 billion (or GBP1 billion) in wages alone in one region of the country, in one year 2014-15 [6]
Direct employment was:
- nearly 29,000 people in 24,200 FTE (full-time equivalent) jobs;
- 4400 FTE jobs were directly funded as back-up staff,
- 2,100 FTE agency jobs.
Health system wages were 26% higher than the regional average.
Indirect employment was:
- 10,000 Full Time Equivalent (FTE) jobs due to procurement of products and services.
This made total employment 40,800 FTE, representing 8.3% of the regional workforce. For just one region of England (please note, England not UK).
Added to that is training and continuing personal development provided for staff. When these staff are local, staff can develop within and beyond their day-to-day roles and improve their wider skills-set that staff take back with them into their communities and families and non-work life.
PROCUREMENT
The National Health Service of England procured just under US$34.2 billion (GBP27 billion) worth of products and services in 2018. Decisions about what health systems buy and how they buy have huge impacts. A positive multiplier effect (for every GBP1 spent, the return is greater than 1 ) of between 1.7 and 2.5 was created. A multiplier effect is used to estimate ‘knock-on’ effect in more jobs and increased local income for the local economy [5].
Purchasing is more than the cost of an item or its medical relevance: it is can additionally be a place-based solution and contribute to strengthening and expanding a local and regional economy by anchoring sustainable practices, products, and services.
LAND AND BUILDINGS OWNERSHIP AND MANAGEMENT
Health system organisations often own or rent large amounts of property in the form of land and buildings. For instance, front-line healthcare delivery in the National Health System of England had 8,253 sites across 6,500 hectares of land [5]. Health system commitment to green buildings and expanding nature positive spaces can impact local community health, staff well-being, lowered operating costs, and generate multiplier effects for a greener local economy when materials and labour are sourced locally and when design is culturally empathetic.
In other words, health systems are economies in their own right and can be considered drivers of economic development.
Our Changing Climate
Our climate is changing faster now than at any other time in the last 24,000 years.
These changes have numerous implications for human health in the Asia-Pacific region:
- In Fiji, hot days (over 35°C) will become twice as frequent by 2039 meaning increased diarrhea, influencing morbidity, loss of work and malnutrition [7].
- In Indonesia, air pollutants and greenhouse gases are often from the same sources (e.g. coal-fired power plants; vehicles) and force heating. Heating air makes it stagnant, so the mixture of pollutants get stuck at ground level, making it breathable and toxic causing 7000 stunting/upper respiratory tract infections in children, +10,000 deaths, and +5000 hospitalizations [8].
- In Lao PDR, increased rainfall and temperature will reduce local rice yields by the 2040s disproportionally affecting the most vulnerable [9].
- On the Maldives, recent modelling suggests that the islands will be increasingly uninhabitable from 2060 onwards due to lack of freshwater [10].
The changing climate means changes in the aetiology of diseases and ill-health experienced by humans.
At the same time, the sheer productiveness of health systems means they are globally responsible for 4.4% of net global climate emissions of carbon dioxide, methane and nitrous oxide gases [11].
World regions and countries differ in their carbon intensity because of volume of goods and services traded and enabling infrastructure. For instance, when energy is substantially generated through coal instead of solar, the carbon intensity of a health system will differ. Health systems are also partially responsible for escalating consumption of natural resources and fully dependent on our collective biodiversity to function.
Climate, biodiversity and human health are fully interdependent – increasing heat, longer periods of drought, more intense tropical storms, with wildfires are directly linked to biodiversity loss and ecosystem degradation. In turn, human and ecosystem well-being deteriorates.
To talk about ‘climate change and health’ means to simultaneously reduce the emissions known to force climate heating, reduce the pollution and ecological degradation already pursued by health system and, at the same time, strengthen system resilience to the changing climate, health equity and ecological sustainability of healthcare
Conclusion
The story that is often told in global health financing is that health is a cost: it’s consumption; it’s passive. But health systems are much more than that.
Health systems are productive economies in their own rights and are drivers of economic prosperity.
Seeing health systems as economies makes it clear that health sectors generate economic value. Transformation to green and clean health systems is about how we go about doing health and well-being not just what, not just a list of projects that end after a few months or years.
Often health systems are focused on regulation drivers or profit, but systems can consciously leverage its resources to change. Global climate finance funds and COP29 financial commitment to a Loss & Repair Fund notwithstanding, there will not be new money for low resourced health systems to transform. This means that health system transformation will ultimately rely on making better use of what we’ve got right now.
And what we have is a lot.
References
[1] World Health Organization https://www.who.int/health-topics/health-financing#tab=tab_1
[2] World Bank Open Data https://data.worldbank.org/
[3] World Health Organization (2020) The Health Financing Progress Matrix: Country Assessment Guide Geneva
[4] World Health Organization (2021) Global Expenditure on Health: Public Spending on the Rise? Geneva
[5] Reed et al (2019) Building Healthier Communities: the Role of the NHS as Anchor Institution Health Foundation, London
[6] Strategy Unit (2017) How could the Economic Impact of the NHS in the Black Country be Increased? https://www.strategyunitwm.nhs.uk/sites/default/files/2017-10/Executive%20Summary%20-%20Black%20Country_0.pdf
[7] The Climate Centre International Red Cross Red Crescent (2021) Fiji Assessment https://www.climatecentre.org/wp-content/uploads/RCRC_IFRC-Country-assessments-FIJI.pdf
[8] Syuhada et al (2023) Impacts of Air Pollution on Health and Cost of Illness in Jakarta, Indonesia International Journal of Environmental Research and Public Health https://doi.org/10.3390/ijerph20042916
[9] Li et al (2017) Impact Assessment of Climate Change on Rice Productivity in the Indochinese Peninsula using a Regional-scale Crop Model International Journal of Climatology https:///doi.org/epdf/10.1002/joc.5072
[10] Curt et al (2018) Most Atolls will be Uninhabitable by the Mid-21st century Because of Sea-level Rise Exacerbating Wave-driven Flooding Science Advances https://doi.org/10.1126/sciadv.aap9741
[11] Karliner et al (2019) Health Care’s Climate Footprint: How the Health Sector contributes to the Global Climate Crisis and Opportunities for Action Health Care Without Harm & ARUP