Health system financing arrangements can be broadly classified according to their compulsory or voluntary nature. Countries that predominantly finance healthcare through government schemes provide care coverage to individuals based on their residency. In other cases, systems that are financed with compulsory health insurance schemes (either through public or private entities) linked to the payment of social contributions or health insurance premiums, provide care coverage based on affiliation. In addition to these, a varying proportion of healthcare spending consists of households’ out-of-pocket payments – either as standalone payments or as part of co-payment arrangements – as well as various forms of voluntary payment schemes such as voluntary health insurance. In the LAC region, substantial fragmentation in health systems often leads to coexisting financing schemes and in some cases, overlap. There is substantial heterogeneity in financing arrangements in LAC, where most standard models of public financing exist in the region (Lorenzoni et al., 2019[1]).
Figure 6.3 reports health expenditure financed by government and compulsory health insurance schemes as a share of GDP in 2024 (or the latest available year), the COVID‑19 peak in 2021 and in 2015. Cuba continued to allocate the highest share of GDP to public health spending, at 7.8%, despite a marked fall from 12.6% in 2021. Haiti remained at the bottom, at 0.6%, while Guyana and Venezuela were also below 2% of GDP. On average, public health expenditure in LAC was broadly unchanged between 2015 and 2024, at around 3.8% of GDP, after rising temporarily to 4.5% in 2021. By contrast, the OECD average increased from 6.5% of GDP in 2015 to 7.0% in 2024, implying a wider gap with LAC. Spending generally surged during the pandemic and then fell back, although in some countries – including Paraguay, Jamaica, Saint Kitts and Nevis, Uruguay and Chile – public health spending efforts remained clearly above pre‑COVID levels.
Government and compulsory health insurance schemes remained the main source of health financing in 2024, accounting for 57% of current health expenditure on average in LAC (Figure 6.4). This remains well below the OECD average of 75%. Higher shares indicate that a larger part of health spending is financed through compulsory, pooled schemes rather than voluntary or out-of-pocket payments, and therefore signal broader baseline coverage of health needs. Between 2015 and 2024, the regional average increased only slightly, from 56% to 57%, leaving the gap with the OECD average virtually unchanged. In 2024, only Cuba and Colombia reached or exceeded the OECD average, while Suriname, Uruguay, Costa Rica and Guyana were also among the countries with the highest compulsory financing shares. At the other end of the range, Haiti, Venezuela, Guatemala and Honduras continued to rely much more heavily on voluntary and out-of-pocket spending. The largest increases since 2015 were observed in Saint Kitts and Nevis, Guyana, Saint Lucia, Jamaica and Suriname, while Panama, Cuba, Argentina and Barbados recorded the largest declines. In Colombia’s case, relatively favourable indicators of financial protection in the region should not be interpreted as a comprehensive assessment of the health system’s performance. Persistent challenges remain in financial sustainability, effective access, territorial inequalities, and the timeliness of service delivery.
Several factors – including the type of system in place, the available fiscal space, and the policy and political priority given to health – determine the size of public funds allocated to health. Relative budget priorities may also shift from year to year as a result of political decision making and economic conditions. In 2024, health expenditure by government and compulsory insurance schemes represented 13.2% of total government expenditure in LAC, compared with 15.5% in OECD countries (Figure 6.5). Costa Rica devoted the largest share of its public budget to health, at 24.9%, followed by Paraguay, Uruguay, Cuba and Panama, all close to or above 20%. At the other end of the spectrum, Venezuela, Haiti, Dominica, Saint Kitts and Nevis, Grenada, Guyana, Barbados and Saint Vincent and the Grenadines allocated less than 8% of government expenditure to health. Between 2015 and 2024, the regional average remained almost unchanged, while the OECD average increased modestly. The largest increases in the region were observed in Paraguay, Chile, Jamaica, Trinidad and Tobago, Peru and Bolivia, while the largest declines were recorded in Dominica, Costa Rica and Guyana (Figure 6.5).
