Assessing the financial sustainability of healthcare expenditure in OECD countries: a target-based multi-criteria decision-making framework incorporating health financing structure and financial protection

Evaluating the sustainability of healthcare financing involves assessing a system’s structural balance, revenue composition, and capacity to deliver financial protection without creating excessive budgetary risks. The heightened cost pressures imposed by the COVID-19 pandemic on global economies have reinforced the critical need for resilient health financing structures that safeguard populations against financial hardship during external shocks. The main objective of this study is to evaluate the financing structure, financial protection, and sustainability performance of health systems across 24 OECD countries over the 2016–2023 period, offering a comparative analysis of pre-pandemic (2016–2019) and post-pandemic (2020–2023) periods within a Multi-Criteria Decision-Making (MCDM) framework. The research evaluated 13 key indicators encompassing health spending, revenue composition, and out-of-pocket burdens retrieved from the OECD database. Criteria weights were determined using the CRITIC method, and performance rankings were constructed using a hybrid TOPSIS-ARAS-G approach based on grey numbers. Two distinct modeling approaches were compared: Standard (Model-S), evaluating coverage/generosity, and Target-Based (Model-T), centered on median spending limits to account for fiscal constraints. Sensitivity was verified via alternative MCDM methods (COPRAS-ARAS-G, MULTIMOORA, TOPSIS). The empirical findings demonstrate that sustainable healthcare financing depends more significantly on the structural composition and balance of funding sources than on the sheer volume of financial outlays. Countries with balanced public financing mechanisms and low out-of-pocket payments—such as Luxembourg, Finland, and Japan—demonstrated higher systemic resilience, whereas countries with high spending volatility or heavy reliance on out-of-pocket costs experienced performance declines post-COVID-19. By evaluating financial sustainability in health financing through a multidimensional and objective approach, this study provides an analytical framework that can contribute to policymakers’ decision-making processes supporting fiscal sustainability and improving resource utilization.