Updated Health Opportunity Cost Estimates for 92 Low- and Middle-Income Countries: Implications for Global Health Financing and Donor Allocation

Estimates of the marginal cost per disability-adjusted life year (DALY) averted from government health expenditure (GHE) provide an empirical basis for allocating scarce health resources to maximise population health. Existing cross-country estimates have informed priority setting in several countries and international policy discussions but are based on data that are now more than a decade old. Since then, patterns of health expenditure, disease burden, and global health financing have changed substantially. This paper provides updated estimates of the marginal cost per DALY averted for 92 low- and middle-income countries (LMIC) by applying previously estimated elasticities of the effect of GHE on health outcomes from Ochalek et al. (2018) to recent data on mortality, morbidity, population structure, and GHE. Two policy options for improving health in LMIC are assessed: (1) the implications of countries allocating 15% of general government expenditure to health consistent with the Abuja Declaration; and (2) reallocating development assistance for health (DAH) to maximise health across countries. Scenario analyses use the estimated elasticities to reflect diminishing marginal returns to health expenditure when calculating the health gains associated with additional resources. Updated estimates of the marginal costs per DALY averted range from approximately $78 to $15,789 across countries. In most countries (72%), estimates are higher than in the previous analysis, largely reflecting increases in GHE. Increasing domestic expenditure to achieve the Abuja Declaration objective would avert 234 million DALYs but require $563 billion across countries. Reallocating $39.1 billion in existing DAH could avert 133.6 million DALYs. Updated estimates provide an empirical basis for informing both domestic priority setting and the allocation of international health financing. Aligning donor funding with country-specific opportunity costs could substantially increase the global health gains achieved with limited resources.