Beyond the Burden: Securing Sustainable Funds for NCD and Mental Health Care

The World Bank report highlights the urgent need for increased domestic financing, health taxes, and strategic development assistance to address the growing burden of noncommunicable diseases (NCDs) and mental health globally. It emphasizes multisectoral collaboration, policy reforms, and international cooperation to ensure sustainable healthcare funding and improve long-term health outcomes.

The World Bank report highlights the urgent need for sustainable financing to tackle the rising burden of non-communicable diseases (NCDs) and mental health conditions. Research from institutions such as the World Health Organization (WHO), the Lancet Commission, and the Global Burden of Disease Study has shown that these conditions are becoming the leading causes of illness, disability, and death worldwide. The primary drivers of this trend include population growth, aging, and lifestyle choices such as smoking, unhealthy diets, and alcohol consumption. The COVID-19 pandemic further underscored these vulnerabilities, as individuals with untreated NCDs faced severe health risks, while global mental health conditions worsened due to economic hardship, social isolation, and increased substance abuse. Despite the growing urgency, most countries have been slow to implement comprehensive policy responses. Limited fiscal space, exacerbated by the pandemic's economic fallout, has made it difficult for governments to allocate the necessary funds to tackle NCDs and mental health. As a result, out-of-pocket (OOP) expenses continue to dominate healthcare financing, disproportionately affecting low-income populations and deepening cycles of poverty. Without decisive action, the economic and social consequences of neglecting these health issues will continue to escalate.

Strengthening Domestic Financing for Health

A key finding of the report is that domestic public financing must increase substantially to reduce reliance on private spending and voluntary health insurance. Studies indicate that funding essential NCD and mental health intervention packages would require an additional 0.1% to 0.4% of GDP in low- and middle-income countries. Most of this funding would be allocated to expanding clinical services and preventive healthcare. However, limited government revenues, weak tax collection systems, and competing national priorities have constrained public health budgets. As a result, OOP spending remains the dominant source of financing in many countries, leading to financial hardship for individuals with chronic illnesses. While voluntary health insurance has emerged in some settings, it is primarily accessible to wealthier populations and contributes to disparities in healthcare access. Countries aiming for universal health coverage must prioritize public financing as the foundation of their health systems. Increasing health budgets will not only reduce financial barriers to essential services but also improve economic productivity by ensuring a healthier workforce. Governments must also adopt innovative financing mechanisms, such as results-based funding models and increased budget allocations for primary care, to maximize the impact of existing resources.

The Power of Health Taxes

One of the most effective ways to raise revenue while simultaneously reducing NCD risk factors is through health taxation. WHO and the World Bank have long advocated for specific excise taxes on tobacco, alcohol, and sugar-sweetened beverages. These taxes are proven to reduce consumption of unhealthy products, improving long-term health outcomes while generating additional government revenue. Studies have dispelled concerns that such taxes harm economic growth, showing instead that they can lead to significant cost savings by reducing the demand for expensive medical treatments. Despite their advantages, health taxes alone are not a comprehensive solution. Broader tax policy and administrative reforms are needed to ensure sustainable healthcare financing. In some countries, governments have earmarked health tax revenues for public health programs, though evidence suggests that the financial gains from such earmarking are often modest. A more effective strategy is to allocate these revenues toward preventive health initiatives and short-term catalytic projects. Another major issue is the widespread use of government subsidies that promote the consumption of unhealthy products. Fossil fuel subsidies and agricultural incentives for sugar, processed foods, and red meat contribute to poor health outcomes and environmental degradation. Phasing out these subsidies presents a unique opportunity for a triple-win scenario: improving public health, advancing climate change mitigation, and strengthening government budgets.

Development Assistance: A Temporary Solution

While domestic financing must be the primary source of healthcare funding, development assistance for health (DAH) can play a catalytic role in launching NCD and mental health initiatives. Historically, DAH has focused on communicable diseases, maternal health, and nutrition programs, leaving NCDs and mental health underfunded. Although increased DAH for these conditions is necessary, it should be used strategically as a time-limited support mechanism rather than a long-term funding source. DAH can help governments overcome initial barriers to program implementation, such as workforce training, investment in digital health infrastructure, and expansion of specialized services. Successful examples of catalytic DAH funding include investments in specialized health facilities, community-based care models, and the implementation of NCD prevention legislation. However, funding recurrent costs such as medication and salaries is generally discouraged, except in humanitarian settings where domestic resources are unavailable. By focusing on short-term interventions with long-term sustainability plans, DAH can help countries transition toward self-sufficient healthcare financing.

Collaboration for a Healthier Future

Beyond national efforts, international collaboration is essential to addressing NCDs and mental health on a broader scale. DAH can be leveraged to support regional initiatives and cross-border challenges, such as combating tobacco smuggling, harmonizing health regulations, and tackling air pollution. Additionally, global cooperation can drive the development of public goods such as new medical treatments, digital health tools, and policy frameworks that benefit multiple countries simultaneously. One of the biggest challenges in implementing effective NCD and mental health policies is overcoming industry resistance. Sectors that profit from unhealthy products, such as the tobacco, alcohol, and processed food industries, often exert significant influence over policymaking. International partnerships between governments, public health organizations, and civil society groups are crucial for countering these interests and ensuring that evidence-based policies take precedence over corporate profits. To meet their commitments under the Sustainable Development Goals (SDGs), national governments must significantly increase public health spending, particularly in the areas of NCDs and mental health. While health ministries play a central role in implementing services, they have limited control over national fiscal policies. Countries that have successfully increased health budgets have done so through multi-sector partnerships, engaging finance ministries, legislatures, and civil society organizations to advocate for increased healthcare funding. These collaborations are critical for securing long-term financial commitments and ensuring that health remains a national priority. Expanding the use of health taxes, phasing out harmful subsidies, and leveraging targeted international aid will help governments build more resilient health systems. By taking decisive action, countries can curb the growing burden of NCDs and mental health conditions, ensuring healthier populations and more sustainable economic growth.