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News Article

Mexico Spends the Least in Healthcare Among OECD Members

By Rodrigo Brugada | Thu, 07/15/2021 - 13:16

In the OECD’s latest report, Mexico ranked as the country with the highest percentage of out-of-pocket spending and one of the countries with the lowest public investment as a percentage of its GDP.

The report "Government at Glance 2021," published by the OECD, indicates that public investment in Mexico represented 1.3 percent of GDP in 2019 (data for 2020 is not available). This represents a decrease of 0.7 percentage points since 2007, when public investment in Mexico was 2.0 percent of GDP. Investment in Mexico is below the average of the rest of the countries in the organization, at 3.3 percent of GDP. El Economista reports that, according to official figures, in 2019 Mexico invested MX$564.5 billion (US$28.4 billion), a drop of 11.8 percent compared to the previous year. In 2020, the government allocated MX$653.3 billion (US$32.8 billion), representing an annual increase of 11.9 percent. 

Public investment can be reflected in multiple ways, including infrastructure works for transportation, energy, health and education, ultimately translating into social welfare. The OECD notes that public investment can also improve productivity and promote economic growth. Government investment often includes purchases needed to implement long-term policies, such as investment in green energy infrastructure to support action against climate change, as the OECD pointed out.

Mexico remains one of the countries that spends the least on health. As of 2019, the latest year for which the OECD has data, Mexico had invested 5.5 percent of its GDP in health. This contrasts with the average of 8.8 percent for the rest of the organization's members that year and does not meet the WHO recommendation to maintain a minimum expenditure of 6 percent of GDP. 

Mexico also ranked as the OECD country with the highest out-of-pocket expenditure, accounting for 41 percent of total health expenditure. The OECD average for this item is 20 percent, and the country with the lowest out-of-pocket expenses is France with 9 percent. Unlike most OECD countries, with the exception of the US, Mexico still has not achieved universal coverage for health services.

The OECD report also considered the performance of health services through three aspects: access, quality and responsiveness of services. The quality of services was measured through the change in hospitalization rates for diabetes, stroke mortality and breast cancer survival. And although there was an increase in the quality of services, there was a decrease in access to services due to reduced coverage. Mexico does not have data for the responsiveness component. 

The report also addresses government revenues, with Mexico also ranking last. Mexico was below the OECD average (37.7 percent), with an income of 22.4 percent of GDP, making it the country with the lowest income. Mexico's low revenue is caused by its limited collection of social security contributions and personal income taxes, in comparison to other member countries. Expanding the country’s limited income is a viable way to expand its budgetary capacity and increase health coverage

The data used in this article was sourced from:  
OECD, El Economista, WHO, MBN
Rodrigo Brugada Rodrigo Brugada Journalist & Industry Analyst