Health Spending in Latin America and the Caribbean Will Double by 2050: What Can Be Done?

Health spending is a major concern in our region, for households and governments alike. Two recently published studies that were commissioned by the IDB examine how health spending may evolve in the near future, what drives these changes, and what can be done.

Health Expenditures Are Growing Fast but Not Equally

The first paper projects that health spending will rise quickly. By 2050, almost all Latin American countries are expected to at least double their per capita current health expenditures (CHE) and for some countries in the Caribbean, growth will be more than double. For example, per-capita health expenditure in Chile is projected to increase 3.4 times by 2050, while in Belize, the projected growth factor is 2.5.

Change in per-capita health spending between 2018/2019 and 2050

Technology, Economic Growth and Aging: Key Drivers of Rising Health Spending

The most important drivers behind this growth are technological change and economic growth, paired with rapid ageing. As countries grow wealthier, people demand more — and more complex — healthcare services. At the same time, the adoption of new medical technologies, increases service intensity, and rising wages in the health sector push costs higher.

In addition, population aging and the growing importance of chronic diseases are reshaping health needs in the region. Latin America and the Caribbean is undergoing one of world’s fastest demographic transitions: The second paper shows that by 2050, the proportion of people aged 70 and older is expected to double or even triple in most countries of the region. Meanwhile, non-communicable diseases (NCDs) in Latin America and the Caribbean accounted for 48–80% of the total disease burden (IHME, 2022) and are likely to become more important in the future.

Proportion of the population aged 70 years and over, by country, in 2020 and in 2050

One consequence of these transitions is that spending growth will be uneven across diseases.  In particular, for Latin America and the Caribbean, spending on chronic conditions like cancer, cardiovascular diseases, and kidney-related illnesses is expected to grow the most, by between 1.5 and 4 percent. In contrast, spending on infectious diseases, maternal health, and perinatal conditions is projected to decline in relative terms, by between 1 and 3 percent.

How Can the Region Prepare for Rising Health Spending?

To manage rising health expenditures and protect population health, countries in Latin America and the Caribbean must act decisively:

• Reform health financing and service delivery strategies for a changing context. Governments need health financing strategies that anticipate demographic changes and the growing burden of chronic diseases. This includes investing more in primary care, prevention, and telemedicine. At the same time, efforts to control costs will be essential; governments need to negotiate better prices for medicines and services, and reform provider payment systems to reward efficiency and quality.

• Spend smarter, not just more. Ensuring value for money in health requires making deliberate choices about what to fund. Countries should adopt cost-effectiveness criteria to guide the selection of health technologies, drawing on tools like the CRITERIA network and benefit package design. Strategic purchasing – buying the right services from the right providers at the right place – can help align spending with population needs. These recommendations are elaborated in the IDB’s flagship report Smart Spending for Health: How to Make Each Dollar Count.

• Reduce financial barriers to care. High out-of-pocket spending is already a concern for many households and may become even more burdensome as health expenditures rise, especially if public financing fails to keep pace and households are left as the residual payer. Stronger public investment and better coordination across fragmented health systems are needed to improve equity and financial protection. Countries will also need to strengthen their health information systems to understand where resources are going, what populations need, and which policies are working. Public financial management systems can help direct and track resources.

• Make health systems resilient and sustainable. Long-term sustainability will depend on creating fiscal space for health, managing the adoption of new technologies responsibly, and aligning reforms with broader goals of universal health coverage. These actions are not just technical fixes — they are essential to ensuring that health systems across the region remain equitable, resilient, and prepared for the future.

As health spending continues to rise in Latin America and the Caribbean, the region faces a critical opportunity to act. Strategic policy responses—focused on prevention, efficiency, and equity—will be essential to ensure that health systems remain sustainable, resilient, and responsive to people’s needs. The choices made today will shape the future of healthcare access, financial protection, and well-being for millions across the region. Read more in the full studies: Future health expenditures and its determinants in Latin America and the Caribbean: a multi-country projection study, and The role of demographic and epidemiologic transitions on growing health expenditures in Latin America and the Caribbean: a descriptive study.

What strategies do you think are most urgent to make health spending more efficient and equitable in Latin America and the Caribbean? Share your insights in the comments below.