Currency equivalents

D. Overall Public Expenditure Patterns

Expenditure trends¹⁵³

18. 
    The overall level of health funding is relatively low. Health expenditure rose from DA 106 billion in 1998 to DA 192 billion in 2002, an increase of 81 percent (Table 8.1). The significance of this increase however must be viewed in context: as a proportion of GDP, health spending rose only from 3.8 percent to 4.3 percent during this period; and as a proportion of NHGDP, it increased from 4.9 percent to 6.3 percent. The level of total health expenditure is thus relatively low in comparison to other countries with similar income levels (Table 8.2).
    

Table 8.1 Health Expenditure Trends, 1998–2002 (% of GDP unless otherwise noted)
	1998	1999	2000	2001	2002
Health expenditure (MMDA)	106	117	145	165	192
Health expenditure	3.8	3.7	3.6	3.9	4.3
Private health expenditure	1.3	1.2	1.1	1	1.1
Public health expenditure	2.5	2.5	2.5	2.9	3.2
Memo: GDP (MMDA)	2,782	3,168	4,023	4,236	4,455
Source: WDI 2005 Note: MMDA equals billions of dinars.

Table 8.2 International Health Expenditure Comparisons (2002 data)

Country	Per capita GDP (US$)	Health expenditure per capita (US$)	Health expenditure per capita (in 2002 US$ PPP)	Public health expenditure (% GDP)	Private health expenditure (% GDP)	Total health expenditure (% GDP)
Algeria	1,823	77	249	3.2	1.1	4.3
Egypt	1,600	59	174	1.8	3.1	4.9
Iran	1,630	104	340	2.9	3.1	6.0
Jordan	1,796	165	375	4.3	5.0	9.3
Morocco	1,234	55	172	1.5	3.1	4.6
Tunisia	2,122	126	396	2.9	2.9	5.8
MENA Region	1,789	80	n.a.	2.5	2.9	5.4
Middle-income countries	1,829	107	n.a.	2.9	3.1	6.0
Lower-middle-income countries	1,324	75	n.a.	2.5	3.3	5.8

Source: World Development Indicators 2005

Note: Not available is indicated by n.a.

18. 
    Algeria faces high health financing needs that require strong efforts to control expenditures and reforms that generate fiscal space. According to Bank estimates, the demographic transition alone will require health spending to rise by about 60 percent in real terms between 2000 and 2020 (Figure 8.6)¹⁵⁴. But other factors will also be in play:
    

• 
  The epidemiological transition is under way. Algeria will face significant costs as the proportion of chronic illnesses rises, while at the same time it will need to continue the fight against communicable diseases such as tuberculosis.
  
• 
  Medical progress to meet public expectations demands costly new technologies and pharmaceuticals. For example, 3,000 drugs in various formats are now being dispensed at hospitals or are eligible for reimbursement when sold to outpatients. France meanwhile reimburses outpatient purchases of 6,057 drugs in all formats (another 2,804 are registered but not reimbursed), and 5,677 are dispensed through hospitals.
  
• 
  Health professionals in the public sector are demanding higher salaries in line with private-sector remuneration. If the salary trend of recent years continues, this could further impact public expenditure (see the analysis of operating expenditure in Table 8.6).
  
• 
  Finally, the social security system reimburses private medical treatment based on rates unrevised since 1987, artificially depressing public expenditures. The reimbursable charge for consultation with a general practitioner is DA 50, while the patient is actually billed around DA 400. A visit to a medical specialist is reimbursable for DA 100, although the patient must pay DA 700. These rates are being revised, which could boost not only public health spending but overall spending if, as is likely, more-generous reimbursements increase the number of privately performed procedures.
  

Figure 8.6 Impact of Future Demographic Changes on Health Expenditure in the MENA Region



Source: World Bank, 2002b.