## A Framework for Estimating Health Spending in Response to COVID-19

_IMF Working Papers, July 24, 2020_

## Source details

**Canonical URL:** [A Framework for Estimating Health Spending in Response to COVID-19](https://www.imf.org/en/publications/wp/issues/2020/07/24/a-framework-for-estimating-health-spending-in-response-to-covid-19-49550)

## Other formats

- [Markdown version](/en/publications/wp/issues/2020/07/24/a-framework-for-estimating-health-spending-in-response-to-covid-19-49550/index.md)
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## Bibliographic details
- Authors: Paolo Dudine, Klaus-Peter Hellwig, Samir Jahan
- Published: July 24, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513550220.001

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### Summary
- Objective: Estimate the additional health spending necessary to treat COVID-19 patients.
- Approach: Expand a Susceptible Infected Recovered model to project the number of people requiring hospitalization; combine projected demand with information about healthcare costs by country and assumptions about capacity constraints in the health sector.
- Core comparative scenarios:
  - No social distancing and lockdowns.
  - Capacity-constrained health systems with effective social distancing and quarantine.

### Modeling and assumptions
- Epidemiological model: Extended Susceptible Infected Recovered framework to project hospitalizations.
- Costing: Use country-level information about healthcare costs to translate projected hospitalizations into spending needs.
- Capacity constraints: Explicit assumptions about health sector capacity determine whether systems must expand to meet demand or whether unmet demand affects outcomes (fatalities and spending).

### Key quantitative findings
- Health system expansion requirement (no social distancing/lockdowns):
  - "Countries would need to expand health systems ten-fold, on average, to assist all COVID-19 patients in need of hospitalization."
- Global additional health spending estimates:
  - Without effective distancing: additional spending range of $0.6–1 trillion globally.
  - With capacity constraints and effective social distancing and quarantine: additional spending reduced to $130–231 billion globally.
- Fatality rate estimates (average):
  - Without distancing: fatality rate of 1.2 percent, on average.
  - With capacity constraints plus effective social distancing and quarantine: fatality rate of 0.2 percent, on average.

### Policy implications and interpretation
- Social distancing and quarantine substantially reduce both additional health spending and average fatality rates:
  - Spending impact: from $0.6–1 trillion down to $130–231 billion.
  - Fatality impact: from 1.2 percent down to 0.2 percent.
- Capacity planning: Without mitigation measures, health systems would face an average ten-fold increase in required capacity to meet hospitalization needs, implying large-scale, rapid expansion of infrastructure, personnel, and resources would be necessary.

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## Content in this bundle

- **Working Paper**
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  - [Working Paper (PDF)](/-/media/files/publications/wp/2020/english/wpiea2020145-print-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2020/07/24/a-framework-for-estimating-health-spending-in-response-to-covid-19-49550_