Decreased health spending in Mexico: challenges and consequences

Mexico’s public spending on health experienced a historic decline during the first five months of the year, according to reports from Secretariat of Finance and Public Credit (SHCP). This decline occurs in the midst of weakness in public revenues and training provided by the Ministry of Health (SSa). These expenses represent a small part of the total budget, and are well below the minimum recommended by the World Health Organization (WHO). This situation poses a major challenge to the healthcare and health care system.

Between January and May, the government of Andrés Manuel López Obrador allocated 240.027 million pesos for health spending, which is just 11% of the more than 2.1 trillion pesos spent in the same period. This figure is worrisome, as it is well below international standards and the previously recommended minimum fromindicating that countries allocate at least 6% of their GDP to health spending, while Mexico allocated only 2.9% of their GDP in 2020.

This decline is the most pronounced since such data began to be recorded in 2007, indicating a lack of investment in an area vital to the well-being of the population. In addition, health spending has witnessed a steady decline over the past three years, which has raised questions about the sustainability and ability of the health system to provide adequate care.

Factors underlying low spending on health

One of the main reasons behind this decline in health spending is weak public revenues. The decline in resource collection through oil has had a negative impact on the government’s public finances, leading to cuts in various sectors, including health. During the first five months of the year, the general income was below estimates at 156.785 million pesos.

The Ministry of Health under Jorge Alcocer saw its budget short, which contributed to lower spending on health. These subsidiary exercises are frequent in the health sector and have led to a lack of resources to meet the medical needs of the population. In the first quarter of the year, South Africa had a sub-exercise of P6,533 million, reflecting inefficiency in executing the allocated budget.

This lack of investment translates into poor patronage of Mexicans and increased out-of-pocket spending. According to data from the SHCP, during the Covid-19 pandemic, personal spending on health in Mexico has increased significantly. In 2019, it represented 42.1%, while in 2020 it increased to 49.4%. This increase in out-of-pocket spending means that Mexican families have to dedicate more resources to health care, which can lead to greater inequality and financial hardship for many families.

The decline in health spending in Mexico reflects an alarming state of the country’s medical care and system. The lack of adequate investment has direct consequences on the quality and accessibility of medical services for the population. In addition, increased out-of-pocket spending places an additional burden on Mexican families, exacerbating inequality and making it more difficult to access health care.

Health spending in Mexico is more than double the average for Mexico’s member states Organization for Economic Cooperation and Development (Organization for Economic Co-operation and Development). Despite the fact that many countries have nearly universal health coverage, out-of-pocket payments remain an important source of health financing. This refers to the proportion of expenditure that households allocate directly to cover various medical care requirements, once their nutritional needs are met.