By 2050, most countries in Latin America and the Caribbean (LAC) are expected to experience per capita health spending growth rates that outpace the growth of their national income. According to a recent IDB-financed study, per capita health spending in the region could nearly triple by 2050, with annual growth rates above 3% between 2030 and 2050. In the Dominican Republic, for example, per capita current health spending is projected to increase by 447%, in Panama by 373%, in Trinidad and Tobago by 257%, and in Colombia by 187%.
The growth in health spending in the region is necessary, since it remains below the OECD average (6.9% vs. 8.5% of GDP) and responds to the unavoidable pressures of demographic and epidemiological transitions, as well as the introduction of new health technologies that extend life with quality.
However, the sector faces redundancies, resource waste, and inefficiencies that ultimately consume precisely those scarce resources we need to generate more health.
This is why it is essential to promote strategies for the efficient use of resources. This becomes even more relevant in our region if we consider that:
- Economic growth is low compared to other emerging economies, public debt continues to rise (63% of GDP in 2024 vs. 59% in 2019), and inflation remains above pre-pandemic levels.
- Up to one-fifth of health spending is wasted* and could be better used.
- Countries often evaluate new health technologies, but very few review existing ones to determine whether they should continue to be funded.
What Does Disinvesting in Health Mean?
Disinvesting in health refers to reducing or eliminating the funding of technologies, uses of technologies, or practices that provide little or no health benefit, or that may even cause harm due to overuse or associated risks. This process frees up resources to reinvest in essential and highly cost-effective interventions. It does not mean spending less, but spending better.
The disinvestment process usually includes phases ranging from identifying and prioritizing candidate technologies for disinvestment, to implementation, monitoring, and reinvestment of the released resources.
To date, most frameworks have been developed for high-income countries, with limited applicability in low- and middle-income countries due to constraints in data, human and financial resources, and contextual differences in health systems, such as governance mechanisms.
A Framework to Guide Disinvestment Decisions in the Region
To provide a practical tool for Latin America and the Caribbean, the IDB developed a conceptual and methodological framework to guide disinvestment decisions in the region (forthcoming). This framework combines existing literature with the use of administrative data, interviews, and surveys with local experts to identify candidate technologies for disinvestment.
We also conducted a proof of concept to calculate the magnitude of waste and demonstrate feasible reinvestment options that are highly cost-effective, generating positive impacts on the delivery of essential services and on people’s quality of life. This is what we call calculating the opportunity cost: the health gains that are lost by devoting resources to health technologies that are considered wasteful, rather than investing them in services or technologies that are essential or highly cost-effective.
This disinvestment approach focuses exclusively on waste, which makes it more politically viable, as it avoids the tensions that arise when disinvesting in technologies or uses that may benefit some patients.
Case Studies: Colombia and the Dominican Republic
We applied this framework in two countries as a proof of concept, identifying six uses of health technologies as candidates for disinvestment. The results suggest that potential savings are significant:
- In Colombia, we found that up to 24% of pre-surgical chest X-rays and 22% of cesarean sections without obstetric indication could be considered waste, equivalent to annual savings between USD 1.4 and 9.5 million per technology analyzed—enough to finance more than 9,000 additional prenatal visits, reducing the current coverage gap by 6.4 percentage points.
- In the Dominican Republic, we found that up to 96% of mammograms in women under 50 and 54% of pre-surgical chest X-rays could be considered unnecessary. The potential savings represent 0.5% of the country’s total health spending—resources that could close the coverage gap in cervical cancer screening by up to 2 percentage points, simply by eliminating waste in the use of a single technology.
These results are just the beginning: the potential is much greater if we consider all technologies with a high probability of generating waste in current medical practice.
Learn More
This work opens a new opportunity to strengthen the efficiency of health spending in the region. We invite you to explore the topic further through the video of our latest webinar. We will soon be publishing the full studies as well.
Note: This study on disinvestment in health was developed by Andrés Vecino, Ramón Abel Castaño, Carolina Moreno, Ginna Paola Saavedra, Ursula Giedion, and Pamela Góngora-Salazar.
*Healthcare waste refers to spending on clinical, operational, or administrative services that do not benefit patients—because they are unnecessary, inefficient, or replaceable by alternatives of equal value—and could be avoided without affecting healthcare outcomes.
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