This document provides an overview of decentralization of health financing and expenditures in OECD countries. It finds that in about half of OECD countries, subnational governments are major players in healthcare systems, financing on average 30% of health expenditures. The share of health expenditures in total subnational government spending has increased since 2000. Specific challenges in decentralized frameworks include the stability and predictability of subnational government revenues, policy setting and central government control over subnational health spending, and other challenges such as revenue volatility and geographic variations.

1. Overview of decentralisation of
health financing and expenditure
in OECD countries
Camila Vammalle (OECD)
Claudia Hulbert (Consultant)
3rd Meeting of the Joint Network on Fiscal Sustainability of
Health Systems
OECD Conference Center, 24-25 April, Paris

2. 1. Background information
1. Role of SNGs in financing health care
2. Increasing weight of health expenditure in SNG
spending
2. Specific challenges in decentralised frameworks
1. Stability and predictability of SNG revenues
2. Policy setting and control over SNG health spending
3. Other challenges
Overview of the presentation

3. In about half OECD countries, SNGs are a major
player in health care systems
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Denmark
Italy
Switzerland
Sweden
Spain
Finland
Austria
Estonia
Poland
Norway
Slovenia
Hungary
Korea
Germany
Portugal
CzechRepublic
Netherlands
Belgium
France
Iceland
Israel
SlovakRepublic
Luxembourg
Greece
Ireland
UnitedKingdom
SNGs CG Social Security
SS
39%
SNG
30%
CG
31%
Repartition of health care spending between levels of government (2012)
Source: OECD National Accounts

4. The share of health expenditure in SNGs’ total
expenditure has increased since 2000
Health as a share of total SNG expenditure (2000-2012)
Source: OECD National Accounts
0%
10%
20%
30%
40%
50%
60%
2000 2007 2012

5. Stability and predictability of SNG revenues for health
Sources of revenues for financing SNG
health expenditure
Source: OECD survey of budget officials on budgeting practices for health, 2013, Question 14 and 16
transfers
from CG
44%
Own
revenues
42%
Transfer
s from
SS
14%
To a large
extent
14%
To a
moderate
extent
29%
To a small
extent
36%
Resources
can only be
varied on a
multy year
basis
21%
To what extent can the CG or SS vary total
transfers for health from one year to the next?

6. Policy setting and control over SNG health care spending
Do CGs set targets for health spending
by SNGs?
Source: OECD survey of budget officials on budgeting practices for health, 2013, Question 14
Do CGs monitor SNG performance on
health spending?
Yes
60%
No
40%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Does CG establish
performance
targets for SNGs?
Does CG prescribe
outputs or
outcome measures
on health for
SNGs?
Does CG require
SNGs to carry out
value for money
analysis?
yes no

7. • Volatility of revenues
• Geographical variations
• Changes in population, internal migration
• Reporting health expenditure to central
governments’ budget authorities
• Size of SNGs may not be optimal for service
delivery
Other specific challenges

8. THANK YOU!
camila.vammalle@oecd.org
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