Who Pays for Global Health?

How health is financed in low- and middle-income countries, the role of foreign aid, and what recent cuts in donor funding mean.

Health care costs money: for doctors, nurses, medicines, clinics and programmes. In low- and middle-income countries, who pays?

Sources of health financing

Government spending from taxes.
Out-of-pocket payments by households at the point of care.
Private insurance, usually a small share in poorer countries.
Development assistance for health: money from foreign governments, international organisations and philanthropies.

Domestic spending matters most

In most middle-income countries, including India, foreign aid is a small share of total health spending. Domestic government and household spending dominate. But in some of the poorest countries, especially in sub-Saharan Africa, donor funding makes up a large share of health budgets.

The big donors

Governments: the United States has historically been the largest donor, followed by countries such as the United Kingdom, Germany and Japan.
Multilateral agencies: the World Health Organization, UNICEF and the World Bank.
Global health initiatives: Gavi, the Vaccine Alliance, and the Global Fund to Fight AIDS, Tuberculosis and Malaria.
Philanthropies: the Bill and Melinda Gates Foundation is one of the largest funders.

Recent cuts

In 2025, the United States sharply cut foreign aid and dismantled much of its aid agency, USAID, and several European countries also reduced aid budgets. Researchers at the Institute for Health Metrics and Evaluation estimated that global development assistance for health fell sharply in 2025, to its lowest level in about 15 years. Health programmes for HIV, malaria, tuberculosis and nutrition in many countries faced disruptions.

The push for self-reliance

Many experts argue that countries should gradually increase domestic funding, improve tax collection and prioritise health in budgets. The African Union’s Abuja Declaration of 2001 committed countries to spend at least 15 percent of government budgets on health, though few have met this target.

Efficiency

Every rupee or dollar should be used well. Economists promote cost-effectiveness analysis and strategic purchasing to get more health for the money.

The clinic's funding

A rural clinic in an East African country receives HIV medicines funded by a foreign programme, staff salaries from the government, and small fees from patients. When foreign funding is cut, the clinic struggles to keep medicines in stock, showing how dependent some systems remain on aid.

Thinking foreign aid pays for most health care in poor countries

Domestic spending dominates in most countries, though some of the poorest depend heavily on donors for key programmes.

Key takeaways

Health is financed by governments, households, insurance and foreign aid.
Domestic spending dominates in most countries, including India.
Aid for health fell sharply in 2025 as the U.S. and others cut budgets.
Countries are being pushed to increase domestic funding and efficiency.