Government Continues Squeezed Health Spending in Q3
The Mexican federal government continued to squeeze health spending in Q3 amid economic downturn and efforts to reduce fiscal deficit this year, according to data from the Secretaría de Hacienda y Crédito Público (SHCP) led by Edgar Amador Zamora.
Between January and September, functional spending on health amounted to 615,424 million pesos, marking a 4.1% annual decline.
Largest Decline Since 2018
This year’s drop is the largest recorded for a comparable period since 2018, when health spending fell by 4.2%.
Defense and Context
The SHCP defended that the executed spending up to September aligns with the schedule, similar to declines observed in other areas like environment, security, culture, housing, etc.
“We cannot just look at the health spending; we are also transitioning towards universal healthcare, which involves observing the protection social spending as well. There’s significant spending related to IMSS-Bienestar, which is crucial for centralizing health services and attention,” said Agustin Rodriguez Bello, head of the Design Unit for Budget, Gasto Control, and Tracking of the Hacienda Secretariat’s spending.
IMSS-Bienestar Spending
The IMSS-Bienestar spending, part of health functional spending, has a smaller portion considered under protection social. By Q3, 132,661 million pesos were disbursed in IMSS-Bienestar, marking a 42.3% annual real increase.
“It’s essential to observe that the functional spending variation (in health) is complemented. Going forward, we should observe and measure health spending by always considering both aspects (health and protection social),” the official added.
Challenges in Health Spending Execution
Rodriguez Bello mentioned that delayed health spending execution is partly due to some medical suppliers’ non-compliance, affecting the situation since mid-year.
Universal Healthcare Promise
Historically, health spending has been a concern for public finances and successive governments, falling far below the WHO recommendation.
As of last year’s data, health spending accounted for 2.7% of the Gross Domestic Product (GDP), while WHO recommends 6%. The pandemic did not change this situation.
Universal healthcare has been discussed to improve Mexican population’s access and attention to this right. “We are moving towards universal healthcare system. No more IMSS, ISSSTE, or IMSS-Bienestar… We will create a universal healthcare system addressing all health issues, not just partial aspects,” Bertha Gómez, undersecretary of Expenditures, stated to legislators in October.
However, when questioned about the timeline for this universal healthcare system during a meeting with lawmakers regarding next year’s budget, Gómez contradicted herself by stating that IMSS and ISSSTE wouldn’t disappear, ensuring no restrictions for individuals seeking medical attention in any unit of these systems.
Future Spending Plans
For the following year, the government plans to reopen health spending. The PEF 2026 allocates 996,254 million pesos for health spending, a 5.8% real increase from this year’s amount.
However, it remains below the WHO recommendation at 2.6% of GDP and represents 9.9% of the total public spending approved for next year, a historical high of 10.1 trillion pesos.
- Q: What is the main reason for the decrease in health spending? The primary cause of the decline is the government’s efforts to reduce fiscal deficit amid economic downturn.
- Q: How does the IMSS-Bienestar spending factor into overall health expenditure? IMSS-Bienestar spending, though a smaller portion of overall health expenditure, has seen a 42.3% annual real increase and is crucial for centralizing health services and attention.
- Q: Why has health spending been a concern for Mexican governments? Historically, health spending has fallen far below the WHO recommendation of 6% of GDP, a situation that persisted even after the pandemic.
- Q: What is the planned health spending for the following year? The government plans to allocate 996,254 million pesos for health spending in the following year, a 5.8% real increase from this year’s amount.
