Laos Struggles to Sustain Universal Healthcare as Public Spending Remains Low

A World Bank-supported review warns that Laos’ progress toward Universal Health Coverage is under threat from low public spending, declining donor aid, rising healthcare costs, and growing inequality in access to care. The report urges urgent reforms to strengthen primary healthcare, improve financing efficiency, and protect poor households from rising medical expenses.

Laos has made important progress in expanding healthcare access over the past decade, but a new World Bank-supported review warns that these gains are now under serious strain. The report, prepared with the Ministry of Health of Laos, the World Health Organization, the Japan International Cooperation Agency, the Luxembourg Development Cooperation Agency, and the Clinton Health Access Initiative, says the country's healthcare system is struggling under the combined pressure of economic instability, rising disease burdens, and shrinking international aid.

The study explains that the COVID-19 pandemic and the country's economic crisis weakened government finances and reduced the ability of both the state and households to pay for healthcare. Inflation surged sharply in recent years, while the Lao kip lost significant value, making imported medicines and medical supplies far more expensive. Although the economy has started to recover, healthcare spending remains far below regional averages.

A Double Burden of Disease

The report highlights that Laos is now facing a "double burden" of disease. Traditional illnesses such as tuberculosis, respiratory infections, maternal health problems, and childhood malnutrition continue to affect large parts of the population, especially in poor and remote communities.

At the same time, noncommunicable diseases such as heart disease, diabetes, kidney disease, and cancer are rising rapidly. Cardiovascular disease has already become the leading cause of illness and disability in the country. Researchers say changing diets, smoking, alcohol consumption, pollution, and aging are all contributing to this growing health crisis.

Childhood malnutrition also remains a major concern. Around one in three children under five is stunted due to chronic undernutrition, with some provinces reporting much higher rates. The report warns that poor nutrition in early childhood affects learning ability, future productivity, and long-term economic growth.

Rural Families Struggle to Access Care

The review points to major inequalities in healthcare access across Laos. Urban areas generally have better hospitals, more doctors, and stronger infrastructure, while rural communities continue to face shortages of health workers, medicines, and medical facilities.

Poor households are much less likely to seek treatment than wealthier families. Women and children in remote provinces often face serious barriers to maternal and child healthcare, including long travel distances and rising transportation costs.

One of the report's biggest concerns is the sharp decline in healthcare use between 2019 and 2024. Hospital admissions and outpatient visits both dropped significantly during this period. Researchers believe many families are now avoiding healthcare altogether because they cannot afford treatment, medicines, or travel expenses.

Although some official figures show lower catastrophic health spending, the report warns that this may not mean people are better protected financially. Instead, many may simply be skipping treatment because it has become too expensive.

Health Financing Under Stress

Public spending on health in Laos remains among the lowest in the world compared to national income. Government health spending accounted for only around four percent of total government expenditure in 2025, far below the country's target of nine percent.

The report also warns that international donor support is declining rapidly. External aid has long financed key services such as immunization, malaria control, tuberculosis treatment, and primary healthcare programs. However, recent cuts in foreign assistance, including major reductions in United States support, are creating serious funding gaps.

Out-of-pocket payments continue to dominate healthcare financing, accounting for nearly half of all health spending in the country. Medicines make up the largest share of household costs, placing heavy pressure on poorer families.

Although national health insurance coverage has expanded significantly, the system itself is facing financial difficulties because government allocations have not kept pace with inflation and rising service costs. Hospitals are increasingly experiencing reimbursement delays and budget shortages.

The Push for Reform

The report argues that Laos can still strengthen its healthcare system if reforms are introduced quickly and effectively. It recommends gradually increasing the health budget, improving the efficiency of spending, and giving greater priority to primary healthcare services.

Researchers also call for stronger taxes on tobacco, alcohol, and sugary drinks to generate additional revenue while improving public health. Better financial management, faster fund disbursement to clinics and hospitals, and expanded use of digital systems are also seen as essential reforms.

The review concludes that the country's challenge is no longer simply about spending more money on health, but about ensuring that resources reach frontline services on time and improve healthcare quality for ordinary people. Without urgent action, the report warns, Laos risks losing many of the health gains achieved over the past two decades.