Globally, over three billion people – many of them in the poorest half of the world’s population – must pay out of pocket for health services:
- In 33 mostly lower-income countries, including many of the world’s most populous nations, direct out-of-pocket payments represent more than 50% of total health expenditures.
- Worldwide, about 150 million people suffer financial catastrophe annually while 100 million are pushed below the poverty line.
- In some countries, up to 11% of the population suffers severe financial hardship each year as a result of catastrophic health spending, and up to 5% is forced into poverty.
As a result of high health care expenditures, many are forced to choose between paying catastrophic portions of their available income and going without needed services, perpetuating a vicious cycle of sickness and poverty.
Low and middle-income countries (LMICs) must overcome a number of design and technical challenges in achieving UHC. Key challenges include:
- Differences in country contexts that require adaptation rather than the importation of specific models from one country to another.
- Large informal sector populations, making it difficult for governments to gauge ability to pay and to collect regular payments from those with means.
- Complexity of health financing systems, in the face of low managerial and administrative capacity.
- Generally low per-capita incomes, limiting available sources of revenue generation.
- Domestic political challenges that can make technically appropriate reforms difficult to implement.
While some of these challenges may seem insurmountable, delaying all reform efforts until later stages of development may result in greater challenges downstream. For example, in the absence of broad health financing frameworks and roadmaps, separate, two-tiered, health systems geared toward the rich may emerge as countries develop and middle and upper classes grow. In addition, as GDP grows, countries’ health spending also inevitably grows. In the absence of government reform efforts, this health spending growth tends to come in the form of regressive and inefficient out-of-pocket payments.