According to the WHO World health report 2010, lost efficiency is responsible for 30-40% of all health expenditures. It is, therefore, an ethical imperative to ensure that financial resources for universal health coverage are spent correctly and transparently in order to offer more services of better quality to the entire population and, in particular, to the most vulnerable groups.

Financing systems need to be specifically designed to provide all people with access to needed health services (including prevention, promotion, treatment, and rehabilitation) of sufficient quality to be effective; and to ensure that the use of these services does not expose the user to financial hardship.

Key facts
  • Significant advances in health have been achieved as a result of the economic and social development of countries (per capita GDP tripled between 1980 and 2012), the consolidation and strengthening of health systems, and the ability to incorporate and apply technology to improve health
  • Latin America and the Caribbean remains the most inequitable region in the world, with 29% of the population below the poverty line and 40% of the poorest population receiving less than 15% of the total income.
  • In the Region, 30% of the population does not have access to health care for financial reasons and 21% does not seek care due to geographical barriers. Populations in vulnerable conditions, very young and very old people, women, boys and girls, ethnic minorities, indigenous and Afro-descendant populations, migrants, and patients with chronic or incapacitating diseases are among the groups most affected by this problem
PAHO Response

Increasing and improving financing, with equity and efficiency, and advancing toward the elimination of direct payment that constitutes a barrier to access at the point of service.

  • Increase public financing for health, in an efficient and sustainable manner. Public expenditure on health equivalent to 6% of GDP is a necessary though not sufficient condition for reducing inequities within the framework of universal health coverage. An increase in public resources for health should increase equity in resource allocation, prioritizing the primary level of care and boosting its response capacity and its capacity to articulate integrated networks of services.
  • Eliminate direct payment at the point of service that acts as a financial barrier to access to guaranteed health services. This will increase financial protection by reducing inequity and exposure to catastrophic expenditures and impoverishment.
  • A pre-paid integrated pool based on the principle of solidarity, that allows cross-subsidies from healthy to sick, from rich to poor, and from young to the elderly, should replace direct payments. This is an effective strategy to increase equity and the efficiency of the health system.
  • Improve efficiency in financing and the organization of the health system.
  • With regard to efficiency in the organization of services, it is necessary, among other steps, to: align pay incentives and payment mechanisms with the results in terms of progress toward universal health coverage; rationalize the introduction and use of drugs and other health technologies with an integrated and multidisciplinary approach; improve the procurement of inputs, essential drugs, and other health technologies by taking advantage of economies of scale and adopting transparent procurement processes; and fight corruption.