Fifteen years later: moving forward Heller’s heritage on fiscal space for health

Economist Peter Heller, writing a seminal paper published in Health, Policy and Planning in 2006, identified five opportunities for expanding fiscal space for health: raising revenue, reprioritizing expenditure, borrowing, using seigniorage and mobilizing external grants. The development of the initial framework marked a significant conceptual advancement in health financing, by situating health reforms within a broader macro-fiscal context. Fifteen years later, fiscal space for health is not viewed simply as a question of finding additional revenues but also as a matter of improving public financial management (PFM) in the health sector, specifically for publicly funded health systems. This paper advances the concept of budgetary space for health, which explores available resources generated through greater overall public expenditure, prioritized budget allocations, and improved PFM. The paper adds a critical component, unpacking the ways through which PFM improvements can maximize budgetary space for health. The approach fits the realities of public finances in the era of the Sustainable Development Goals. The key implication is that PFM aspects should be systematically included in assessments of budgetary space to inform more effective country dialogues between the finance and health sectors.