Total health expenditures refer to the sum all of the money spent by a government for providing public and private health. These expenditures cover various components of healthcare, from the provision of preventive and curative health services, to emergency aid, nutritional counseling, and family planning. Not included within these expenditures are provisions for sanitary water and other utilities to the population.
The Importance of Healthcare Expenditures
The general expenditures on health made by a government are comprised by all direct outlays for the enhancement of the health status of both specific groups of individuals and the general population aggregately. In general, developing countries have low absolute health expenditure rates, but that picture can change when looking at countries’ health expenditures relative to their Gross Domestic Product (GDP), which is the sum of the value of all goods and services produced within a country within a given year.
Healthcare Versus GDP: An Ambiguous Picture
Using classifications compiled by the World Health Organization, we see that Timor-Leste, or East Timor, is the country with the lowest health expenditures relative to GDP in the world, standing at only 1.5%. Timor-Leste has not always had a place on the list of countries who spend the least on healthcare relative to GDP. However, in recent years, the federal government of the country has made controversial decision to cut healthcare spending - in 2014, the government cut $15 million off of the budget. The country is currently facing a healthcare crisis, where doctors are faced with lack of access to vital resources like medication and equipment.
Second on the list of the lowest healthcare spending relative to GDP is Laos, where 1.9% of the country's GDP is spent on healthcare. Unfortunately, in Laos, access to adequate healthcare is incredibly lacking. Although there are several hospitals within the country, the infrastructure is said to be of poor quality. Access to healthcare is especially poor in the rural areas. The central Asian nation of Turkmenistan trails closely behind Laos, with 2.1% of its GDP expenditure allocated to healthcare. Formerly part of the USSR, funding for healthcare in Turkmenistan experienced a decrease once the country attained independence. Like Laos, care is harder to come by in rural areas. The country did away with free public health care in 2004.
A slightly more difficult situation to analyze is that of Qatar. While it’s true that the World Health Organization ranked them on the fourth place among the countries with the lowest health expenditures relative to GDP (2.2%), Qatar also has a low population and disproportionately high GDP per capita. The rapport between the lower population base and the high GDP shows clearly that Qatar has, in fact, one the highest healthcare expenditures per capita globally. Nonetheless, the government should pay attention to gradually raising the budget dedicated to health, because the fast-growing population will surely demand more from the health system. Another stress on the healthcare infrastructure that Qatar would be wise to consider is the marked increment of diseases of civilization due to sedentary lifestyles and the decreased physical demands coinciding with increased affluence, such as obesity and diabetes. Taking into account the two key factors of a growing population and high-income levels, it’s easy to see why investments in the healthcare system in Qatar are promising opportunities for many financiers around the globe.
As we have seen, the list is characterized by very different kinds of countries: very underdeveloped nations in Asia and Sub-Saharan Africa where low health care expenses are consistent with larger trends of limited access to resources and infrastructure in general, and states with petroleum-fueled economies where relative healthcare expenditures are diluted to disproportionately high per capita GDPs compared to the rest of the world. While low health expenditures relative to GDP doesn’t necessarily mean poor quality of health services in a country, in many cases governments should consider thoroughly scrutinizing the healthcare budgets. After all, it’s an investment in their future.