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Fiscal Sustainability of Health Systems

Bridging Health and Finance Perspectives

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The health systems we enjoy today, and expected medical advances in the future, will be difficult to finance from public resources without major reforms. Public health spending in OECD countries has grown rapidly over most of the last half century. These spending increases have contributed to important progress in population health: for example, life expectancy at birth has increased, rising on average by ten years since 1970. The challenge now is to sustain and enhance these achievements in a context of tight fiscal constraints in many countries combined with upward pressure on health spending from factors such as new technological advances and demographic changes. Finding policies that can make health spending more sustainable without compromising important achievements in access and quality requires effective co-operation between health and finance ministries. Sound governance and co-ordination mechanisms are therefore essential to ensure effective policy choices. Prepared by both public finance and health experts, this report provides a unique detailed overview of institutional frameworks for financing health care in OECD countries. One of the main features of this book is a comprehensive mapping of budgeting practices and governance structure in health across OECD countries.

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Budgeting practices for health in OECD countries

This chapter presents the results of an OECD survey of budget officials on budgeting practices for health, which aims at shedding light on the different institutional frameworks, and the instruments available to control health care expenditure in OECD countries. Health represents an important share of public spending, and one that has consistently increased faster than other areas of spending, and faster than GDP. However, controlling public health expenditure growth is particularly difficult for budget officials. A number of factors and institutions are necessary to allow governments to control health expenditure and ensure their fiscal sustainability: long-term forecasts, medium-term projections, timely information on expenditure, adequate revenues, expenditure management tools, monitoring and evaluation procedures, political agreement on targets and co-ordination mechanisms.

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