Background: All governments face pressure to maximise the impact of their health budget. We aimed to measure health spending inefficiency for 201 countries from 1995 to 2022, estimate the cost of one additional year of healthy life, and assess contextual factors associated with health spending inefficiency.
Methods: We extracted data from the Global Burden of Diseases, Injuries, and Risk Factors Study 2023 and the Financing Global Health 2024 project to estimate health spending inefficiency using a non-linear stochastic frontier meta-analysis model designed to assess health-adjusted life expectancy (HALE). This model produced a frontier that represents the best possible HALE for a given level of health spending. Inefficiency scores were measured as the distance between a country's HALE and the frontier at that country's level of spending. We used the slope of the frontier to estimate the cost of one additional year of healthy life, and we regressed inefficiency scores on contextual factors and policy variables to measure their association with health spending inefficiency.
Findings: The relationship between health spending and HALE was positive for all levels of spending, although health spending inefficiency existed in most countries. Globally, health spending inefficiency decreased from 1995 to 2019, increased considerably in 2020 and 2021 due to the COVID-19 pandemic, and recovered substantially in 2022. We found decreasing returns to additional health spending, with the cost of one additional health-adjusted life-year varying from US$92 (95% uncertainty interval 43-239) per capita for a country spending $100 per capita to $11 213 (8031-57 754) per capita for a country spending $5000 per capita. More efficient spending was associated with better governance, having a higher percentage of health expenditure from the government, infrastructure that facilitates access to and delivery of health care, and higher uptake of preventive care measures.
Interpretation: Expanding government-provided health-care coverage would decrease the inefficiency of the health-care system. Countries should also focus on strengthening democracy, building infrastructure, and increasing the use of, and access to, preventive care.
Funding: Bill & Melinda Gates Foundation.
Copyright © 2025 The Author(s). Published by Elsevier Ltd. This is an Open Access article under the CC BY 4.0 license. Published by Elsevier Ltd.. All rights reserved.