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Smarter Spending on Health Care: How can We Achieve more Health by Reducing Waste?
This policy brief examines how Latin American and Caribbean countries can achieve better health outcomes with existing resources by reducing inefficient spending on health technologies and their use (HTUs). In a context of fiscal pressure and high levels of wasteestimated at 2040% of health expenditurethe document proposes a framework for strategic disinvestment that allows governments to identify, prioritize, and quantify low-value interventions, and reallocate those resources toward high-value services. The methodology combines expert consultations, literature review, and surveys to identify potential disinvestment candidates, which are then ranked by frequency of use and assessed using three criteria: relevance (potential savings), measurability, and modifiability. Using payer data, the framework estimates inappropriate use and its associated costs, and models potential health gainsmeasured in quality-adjusted life years (QALYs) and coverage expansionif those resources are redirected to cost-effective “best buys” in health. Proof-of-concept applications in Colombia and the Dominican Republic suggest that significant savings and health improvements are feasible, demonstrating how this approach can strengthen fiscal sustainability, efficiency, and equity in health systems. The brief concludes that strategic disinvestment is a practical and politically viable tool to support smarter health spending in the region.
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