Parents and caregivers line up with their children at an immunization centre in Janakpur, southern Nepal. Meanwhile recent funding cuts have caused “severe disruptions” to health services in almost three-quarters of all countries, according to the head of the UN World Health Organization (WHO), Tedros Adhanom Ghebreyesus. April 2025. Credit: UNICEF
By Hatice Beton, Roberto Durán-Fernández, Dennis Ostwald and Rifat Atun
LONDON, Jun 19 2025 – As G7 leaders of the world’s wealthiest nations wrapped up their summit in Kananaskis June 16, a critical issue was absent from the agenda: the future of global health financing.
Amid escalating geopolitical tensions, trade conflicts and cuts to development aid, health has been sidelined – less than five years since COVID-19 devastated lives, health systems and economies.
With the fiscal space for health shrinking in over 69 countries, it’s time to recognise that health financing is no longer solely a public sector concern; it is a fundamental pillar of economic productivity, stability, and resilience.
A glimmer of hope has emerged from South Africa, the current G20 Presidency host, and from the World Health Organization (WHO). A landmark health financing resolution, adopted at last month’s World Health Assembly calls on countries to take ownership of their health funding and increase domestic investment.
While this is a promising step, the prevailing discourse continues to rely on outdated solutions which are often slow to implement and fall short of what is needed.
Invest Smarter, Not Just More, in Health
Recent trends among G20 countries show that annual healthcare expenditure is actually declining across member states. In 2022, health expenditure dropped in 18 out of 20 G20 nations, leading to increased out-of-pocket expenses for citizens.
While countries like Japan, Australia, and Canada demonstrate a direct correlation between higher per capita health expenditure and increased life expectancy, others, such as Russia, India, and South Africa, show the opposite.
This disparity underscores a crucial point: the quality and efficiency of investment matters more than quantity. Smart investment encompasses efficient resource allocation, equitable access to affordable care, effective disease prevention and management, and broader determinants of health like lifestyle, education, and environmental factors.
Achieving positive outcomes hinges on balancing health funding – the operational costs – with sustainable health financing – the capital costs.
Private capital is already moving into health, what’s missing is coordination and strategic alignment
Despite the surge in healthcare private equity reaching USD 480 billion between 2020 and 2024, many in the sector remain unaware of this significant shift. Recent G20 efforts have focused on innovative financing tools, but what’s truly needed are systemic reforms that reframe health as a core pillar of financial stability, economic resilience, and geopolitical security, not just a public service.
This year’s annual Health20 Summit at the WHO, supporting the G20 Health and Finance Ministers Meetings, addresses this need by launching a new compass for health financing: a groundbreaking report on the “Health Taxonomy – A Common Investment Toolkit to Scale Up Future Investments in Health.”
Why do we need an investment map for health?
The answer is simple: since the first ever G20 global health discussions under Germany’s G20 Presidency in 2017, there has been no consistent effort to rethink or coordinate investments. G20 countries still lack a strategic dialogue between governments, health and finance ministries, investors and the private sector.
Market-Driven, Government-Incentivised: The Path Forward
Building on the European Union’s Green Taxonomy, the health taxonomy aims to foster a shared understanding and common language among governments, companies, and investors to drive sustainable health financing. Investors, Asset Managers, Venture Capitalists, G20 Ministries of Health and Finance, Multilateral Development Banks (MDBs), and International Organisations broadly agree that a market-driven taxonomy is both credible and practical.
Governments can have greater confidence knowing it has been tested with investors and is grounded in market realities.
The Health Taxonomy report identifies a key barrier to progress: the fundamental confusion between health funding and health financing: Health financing refers to the system that manages health investments, such as raising revenue, pooling resources and purchasing services. In contrast, health funding refers to the actual sources of money.
Increasing health funding alone will not improve health outcomes if the financing system is poorly designed. Conversely, a well-developed health financing framework won’t succeed without sufficient funding. Both are essential and must work together.
The health taxonomy has the potential to serve as a vital tool for policy planning sessions, strategic boardroom discussions and investment committees, thereby enabling health to be readily integrated into existing portfolios and strategies. It could also support more systematic assessments of health-related risks and economic impacts, including through existing processes like the IMF’s Article IV consultations and other macroeconomic surveillance frameworks.
The report urges leading G20 health and finance ministers to rethink and align on joint principles for health funding and financing.
The next pandemic could be more severe, more persistent, and more costly. Failure to invest adequately in health before the next crisis is a systemic risk our leaders can no longer afford to ignore.
Hatice Beton is Co-Founder, H20Summit; Roberto Durán-Fernández; PhD, is Tec de Monterrey School of Government, Former Member of the WHO’s Economic Council; Dennis Ostwald is Founder & CEO, WifOR Institute (Germany); Rifat Atun is Professor of Global Health Systems, Harvard T.H. Chan School of Public Health
IPS UN Bureau
