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This article explores the major challenges to the sustainability of health sector financing in the countries of the western Balkans – Albania, Bosnia and Herzegovina, the Former Yugoslav Republic of Macedonia, Montenegro, Serbia and the province of Kosovo. It focuses on how the incentives created by the different elements of the healthcare financing system affect the behaviour of healthcare providers and individuals, and the resulting inefficiencies in revenue collection and expenditure containment. The article analyses patterns of healthcare expenditure, finding that there is some evidence of cost containment, but that current expenditure levels – while similar to that in EU countries as a share of GDP – are low in per capita terms while the fiscal space to increase expenditures is extremely limited. It also examines the key drivers of current health care expenditure and the most significant barriers to revenue generation, identifying some key health reforms that countries in the sub-region could consider in order to enhance the efficiency and sustainability of their health systems. Data are drawn from international databases, country institutions and household surveys.

Sustainability of health care financing in the western Balkans: an overview of progress and challenges