Health spending in OECD countries in 2004: an update

In 2004, U.S. health care spending per capita was 2.5 times greater than health spending in the median Organization for Economic Cooperation and Development (OECD) country and much higher than health spending in any other OECD country. The United States had fewer physicians, nurses, hospital beds, doctor visits, and hospital days per capita than the median OECD country. Health care prices and higher per capita incomes continued to be the major reasons for the higher U.S. health spending. One possible explanation is higher prevalence of obesity-related chronic disease in the United States relative to other OECD countries.     

Health spending in OECD countries: obtaining value per dollar

In 2005 the United States spent $6,401 per capita on health care-more than double the per capita spending in the median Organization for Economic Cooperation and Development (OECD) country. Between 1970 and 2005, the United States had the largest increase (8.3 percent) in the percentage of gross domestic product (GDP) devoted to health care among all OECD countries. Despite having the third-highest level of spending from public sources, public insurance covered only 26.2 percent of the U.S. population in 2005. The United States was equally likely to be in the top and bottom halves for sixteen quality measures compiled by the OECD.     

Health spending, access, and outcomes: trends in industrialized countries.

In 1997 the United States spent $3,925 per capita on health or 13.5 percent of gross domestic product (GDP), while the median Organization for Economic Cooperation and Development (OECD) country spent $1,728 or 7.5 percent. From 1990 to 1997 U.S. health spending per capita increased 4.3 percent per year, compared with the OECD median of 3.8 percent. The United States has the lowest percentage of the population with government-assured health insurance. It also has the fewest hospital days per capita, the highest hospital expenditures per day, and substantially higher physician incomes than the other OECD countries. On the available outcome measures, the United States is generally in the bottom half, and its relative ranking has been declining since 1960.     

It's the prices,stupid: why the United States is so different from other countries

This paper uses the latest data from the Organization for Economic Cooperation and Development (OECD) to compare the health systems of the thirty member countries in 2000. Total health spending--the distribution of public and private health spending in the OECD countries--is presented and discussed. U.S. public spending as a percentage of GDP (5.8 percent) is virtually identical to public spending in the United Kingdom, Italy, and Japan (5.9 percent each) and not much smaller than in Canada (6.5 percent). The paper also compares pharmaceutical spending, health system capacity, and use of medical services. The data show that the United States spends more on health care than any other country. However, on most measures of health services use, the United States is below the OECD median. These facts suggest that the difference in spending is caused mostly by higher prices for health care goods and services in the United States.     

Health care spending growth: how different is the United States from the rest of the OECD?

This paper compares the long-term (1970-2002) rates of real growth in health spending per capita in the United States and a group of high-income countries in the Organization for Economic Cooperation and Development (OECD). Real health spending growth is decomposed into population aging, overall economic growth, and excess growth. Although rates of aging and overall economic growth were similar, annual excess growth was much higher in the United States (2.0 percent) versus the OECD countries studied (1.1 percent). That difference, which is of an economically important magnitude, suggests that country-specific institutional factors might contribute to long-term health spending trends.     

Cross-national comparisons of health systems using OECD data, 1999

This paper presents selected components of the most recent (1999) Organization for Economic Cooperation and Development (OECD) Health Data. Previous trends in spending for health care, supply and use of health care resources, and health status are updated for the thirty industrialized countries in the OECD. In 1999 the United States spent 53 percent more on health care than any other OECD country spent. The paper reviews two possible reasons for the difference: economic development and population aging. It discusses spending, supply, and utilization for specific categories of health care services: pharmaceuticals, physicians, hospitals, and high-technology services. The paper concludes with a consideration of the strengths and weaknesses of using OECD data to compare health systems.     

Health spending in the United States and the rest of the industrialized world

U.S. citizens spent $5,267 per capita for health care in 2002--53 percent more than any other country. Two possible reasons for the differential are supply constraints that create waiting lists in other countries and the level of malpractice litigation and defensive medicine in the United States. Services that typically have queues in other countries account for only 3 percent of U.S. health spending. The cost of defending U.S. malpractice claims is estimated at $6.5 billion in 2001, only 0.46 percent of total health spending. The two most important reasons for higher U.S. spending appear to be higher incomes and higher medical care prices.     

International health care spending

Trends in health are reviewed for the member countries of the Organization for Economic Cooperation and Development (OECD) covering the following: the basic difficulties inherent in international comparative studies; the absolute levels of health expenditures in 1984; the levels and rates of growth of the health share in the gross domestic product (GDP) and the public share of total health expenditures; the elasticities of real health expenditures to real GDP for the 1960-75, 1975-84, and 1960-84 time periods; growth in health expenditures for the largest 7 OECD countries in terms of growth in population, health prices, health care prices in excess of overall prices, and utilization/intensity of services per person. International comparisons are a problem due to differences in defining the boundaries of the health sector, the heterogeneity of data, and methodological problems arising from comparing different economic, demographic, cultural, and institutional structures. The most difficult problem in international comparisons of health expenditures is lack of appropriate measures of health outcome. Exhibit 1 contains per capita health expenditures denominated in US dollars based on GDP purchasing power parities for 21 OECD countries for 1984. Per capita health expenditures ranged from less than $500 in Greece, Portugal, and Spain to over $1400 in Sweden and the US, with an OECD average of $871. After adjusting for price level differences, there still appears to be a greater than 3-fold difference in the "volume" of services consumed across the OECD countries. To determine if per capita health expenditures are related to a country's wealth as measured by its per capita GDP, the relationship between per capita health expenditures and per capita GDP for the 21 countries were examined for 1984. The data points and the "best fitting" trend line indicate a statistically significant relationship in which each $100 difference in per capita GDP is associated with a $10.50 difference in per capita health expenditures. The calculated elasticity is 1.4 indicating that each 10% difference in per capita GDP is associated with a 14% difference in per capita health expenditures. The analysis indicates that variations in per capita GDP, alone, are associated with 7 of the variation in per capita health spending. In 1984, health spending in the 18 OECD countries (for which data were consistently available for all 6 different years) was on average 7.5% of GDP. The US had the highest GDP share (10.7%) and Greece had the lowest (4.6%). The average elasticity of 16 of the 18 countries as a group substantially exceeded 1.0 for the 1960-84 period, as well as the 1960-75 (1.6) and 1975-84 (1.3) subperiods. Thus, real health spending increased 60% faster than the real GDP between 1960-84 and between 1960-75 and 30% faster between 1975-84.     

Private finance and sustainable growth of national health expenditures

This analysis explores the role of the private sector relative to all health spending among Organization for Economic Cooperation and Development (OECD) countries. Bi-variate regression was employed for 31 countries using current data. It was found that the share of GDP allocated to health varies among countries, ranging from 5 percent in Turkey to 14 percent in the United States. Variation in per capita income explains much of this difference but other factors are important too. One appears to be the role of the private sector in financing health expenditures. Our analysis concludes that concern about rising health sector costs should be placed in a larger context: rising health care costs may be justified if benefits are large enough and cover the opportunity costs of alternative uses of resources.     

What can the U.S. learn from national health accounting elsewhere?

The United States is typically seen as an outlier in health spending when compared with other advanced nations. Recent improvements in health accounting in lower- and middle-income countries suggest some common features with the high and pluralistic spending in the United States. The author discusses recent developments and findings in health accounting outside the Organization for Economic Cooperation and Development (OECD) and their relevance for the United States. He argues that we should expect more fruitful exchanges in the future.     

Has development assistance for health facilitated the rise of more peaceful societies in sub-Saharan Africa?

ABSTRACT

Growing evidence suggests that health aid can serve humanitarian and diplomatic ends. This study utilised the Fragile States Index (FSI) for the 47 nations of the World Health Organizations’ Africa region for the years 2005–2014 and data on health and non-health development aid spending from the United States (US) for those same years. Absolute amounts of health and non-health aid flows from the US were used as predictors of state fragility. We used time-lagged, fixed-effects multivariable regression modelling with change in FSI as the outcome of interest. The highest quartile of US health aid per capita spending (≥$4.00 per capita) was associated with a large and immediate decline in level of state fragility (b?=??7.57; 95% CI, ?14.6 to ?0.51, P?=?0.04). A dose–response effect was observed in the primary analysis, with increasing levels of spending associated with greater declines in fragility. Health per-capita expenditures were correlated with improved fragility scores across all lagged intervals and spending quartiles. The association of US health aid with immediate improvements in metrics of state stability across sub-Saharan Africa is a novel finding. This effect is possibly explained by our observations that relative to non-health aid, US health expenditures were larger and more targeted.     

Interpreting forty-three-year trends of expenditures on public health in Canada: Long-run trends,temporal periods,and data differences

The COVID-19 pandemic has raised concerns around public health (PH) investments. Among OECD countries, Canada devotes one of the largest shares of total health expenditures to PH. Examining retrospectively PH spending growth over a very long period may hold lessons on how to reach this high share. Further, different historical periods can be used to understand how macroeconomic conditions affect PH spending growth. Using forty-three years of data, we examine real PH spending growth per capita, comparatively between thirteen Canadian jurisdictions and with other key publicly funded healthcare sectors (physicians, hospitals, and pharmaceuticals), as well as by four periods defined by macroeconomic conditions. We find a five-fold increase on average in PH spending since 1975, a growth above physicians and hospitals, but below pharmaceuticals. However, there is substantial variation in PH growth between periods and across the country. Because concerns have been raised over PH spending data in other OECD countries, we explore differences between spending estimates reported by the national agency and ten provincial budgetary estimates, and find the former is larger. The magnitude of the difference varies between jurisdictions but not much over time. Although these differences do not challenge the presence of growth in PH spending, they show that the growth may be below that of hospitals. A better categorization of PH financing data is warranted.     

The impact of no-fault compensation on health care expenditures: An empirical study of OECD countries

Around the world, governments are faced with spiralling health care expenditures. This raises the need for further insight in the determinants of these expenditures. Existing literature focuses primarily on income, ageing, health care financing and supply variables. This paper includes medical malpractice system characteristics as determinants of health spending in OECD countries. Estimates from our regression models suggest that no-fault schemes for medical injuries with decoupling of deterrence and compensation reduce health expenditures per capita by 0.11%. Furthermore, countries that introduced a no-fault system without decoupling of deterrence and compensation are found to have higher (+0.06%) health care spending.     

Analyzing Whether Countries Are Equally Efficient at Improving Longevity for Men and Women

Objectives. We examined the efficiency of country-specific health care spending in improving life expectancies for men and women.Methods. We estimated efficiencies of health care spending for 27 Organisation for Economic Co-operation and Development (OECD) countries during the period 1991 to 2007 using multivariable regression models, including country fixed-effects and controlling for time-varying levels of national social expenditures, economic development, and health behaviors.Results. Findings indicated robust differences in health-spending efficiency. A 1% annual increase in health expenditures was associated with percent changes in life expectancy ranging from 0.020 in the United States (95% confidence interval [CI] = 0.008, 0.032) to 0.121 in Germany (95% CI = 0.099, 0.143). Health-spending increases were associated with greater life expectancy improvements for men than for women in nearly every OECD country.Conclusions. This is the first study to our knowledge to estimate the effect of country-specific health expenditures on life expectancies of men and women. Future work understanding the determinants of these differences has the potential to improve the overall efficiency and equity of national health systems.Growth in health expenditures has outpaced growth in gross domestic product (GDP) across countries in the Organisation for Economic Co-operation and Development (OECD) since the 1970s,1 contributing, in some countries, to structural deficits and expanding national debts. In the United States, publicly-financed health care costs rose from $646 billion in 2001 to $1141 billion in 2009.2 High rates of growth characterize most of the Group of Twenty leading economies, where health care spending continues to be a major contributor to public debt.3 Combined with the fiscal constraints imposed by the recent economic downturn, the long-term debt situation is becoming unsustainable in some countries.3,4 It is increasingly accepted that health care reform must be part of the solution for mitigating debt growth.Proposals for reducing costs by increasing the efficiency of the health care system have been at the center of public discourse concerning health care reform. In previous research, the most accepted method for assessing health system efficiency has been to investigate the relation between health spending and life expectancy.5,6 This notion of efficiency is predicated on the ability of nations to strategically finance their health systems to attain key health goals. As is common in the literature, efficiency is defined by the changes in life expectancy that result from variation in health expenditures.7 International comparisons of health care efficiency allow researchers to identify stronger and weaker performers and may yield policies for improving health care efficiency.Earlier studies that have examined health care efficiency among OECD countries demonstrated large international differences in spending, and unequal effectiveness of health interventions, suggesting that the productive efficiency of health systems may vary across nations.5,8 However, prior work has not accounted for social expenditures across countries, which are associated with population health in the OECD.9The identification of differential health-spending efficiencies across genders has been limited to the important contribution of Asiskovitch, who found that men gain more per dollar spent than women on average across the OECD.7 Our study furthers this investigation by analyzing country-specific health expenditures. This is important because it addresses a fundamental question: is the gender disparity the same in every country? Answering this question provides insight into the extent to which they can be altered. Additionally, although Asiskovitch used health expenditures as percent of GDP, we analyze health expenditures per capita, in purchasing-power parity equivalent 2000 US dollars, to ensure international comparability, simultaneously avoiding fluctuations from inflation or exchange rates.In this study, we estimated the relation between health expenditures and life expectancy in 27 OECD countries, using a health production model that controlled for social expenditures and overall levels of economic development. Furthermore, we assessed whether the efficiency of health care expenditures within countries varied for men and women. To the best of our knowledge, this study is the first to examine the efficiency of health expenditures in improving longevity of men and women in individual countries.     

Who administers? Who cares? Medical administrative and clinical employment in the United States and Canada.

OBJECTIVES. We compared US and Canadian health administration costs using national medical care employment data for both countries. METHODS. Data from census surveys on hospital, nursing home, and outpatient employment in the United States (1968 to 1993) and Canada (1971 and 1986) were analyzed. RESULTS. Between 1968 and 1993, US medical care employment grew from 3.976 to 10.308 million full-time equivalents. Administration grew from 0.719 to 2.792 million full-time equivalents, or from 18.1% to 27.1% of the total employment. In 1986, the United States deployed 33,666 health care full-time equivalent personnel per million population, and Canada deployed 31,529. The US excess was all administrative; Canada employed more clinical personnel, especially registered nurses. Between 1971 and 1986, hospital employment per capita grew 29% in the United States (mostly because of administrative growth) and fell 14% in Canada. In 1986, Canadian hospitals still employed more clinical staff per million. Outpatient employment was larger and grew faster in the United States. Per capita nursing home employment was substantially higher in Canada. CONCLUSIONS. If US hospitals and outpatient facilities adopted Canada's staffing patterns, 1,407,000 fewer managers and clerks would be necessary. Despite lower medical spending, Canadians receive slightly more nursing and other clinical care than Americans, as measured by labor inputs.     

What We Say and What We Do: County-level Public Spending for Health Care

The purpose of this study is to examine county-level public spending for health care services in Kansas and to explain variation in spending levels with a model composed of population density, population age and per capita income. Data are abstracted from budget documents for all 105 counties in Kansas for the years 1994, 1995 and 1996. Health care expenditures are defined as county tax revenues spent for ambulance, hospitals, ambulatory care, home health services, nursing homes, and mental health and substance abuse services. Results show that Kansas counties spent between 12.1 percent and 13.6 percent of their budgets to fund local health care services between 1994 and 1996, spending more than $133 million in 1996 alone. In 10 counties, one-quarter to one-third of the budget went for health services. Low population density and relatively high per capita income explained nearly one-third of the variation in how much counties spent and an even greater proportion when analysis was limited to the most rural counties. Findings from this study suggest there may be a significant local commitment in the United States to publicly supported health care services, more support than typically recognized and perhaps more than is estimated in national health care spending data. Future research on the economic effects of the health sector on local communities should take account of local spending for health care, especially at the county level.     

An income-weighted international average for comparative analysis of health expenditures

Data from 17 countries across 28 years are used to estimate an international health expenditure function based on real per capita GNP. Actual and expected spending levels are compared for 24 countries. Between 1960 and 1987, it has been rare for health expenditure in any country to be more than +/- 20 per cent from the projected value. The norm is for spending to rise at 1.5 times the growth rate of GDP. Two countries appear to display significant anomalies. Spending in the United Kingdom is consistently 15-25 per cent below normal for all years, and Danish expenditure has declined from 7 to 6 per cent of GDP since 1975.     

An approach to forecasting health expenditures,with application to the U.S. Medicare system

OBJECTIVE: To quantify uncertainty in forecasts of health expenditures. STUDY DESIGN: Stochastic time series models are estimated for historical variations in fertility, mortality, and health spending per capita in the United States, and used to generate stochastic simulations of the growth of Medicare expenditures. Individual health spending is modeled to depend on the number of years until death. DATA SOURCES/STUDY SETTING: A simple accounting model is developed for forecasting health expenditures, using the U.S. Medicare system as an example. PRINCIPAL FINDINGS: Medicare expenditures are projected to rise from 2.2 percent of GDP (gross domestic product) to about 8 percent of GDP by 2075. This increase is due in equal measure to increasing health spending per beneficiary and to population aging. The traditional projection method constructs high, medium, and low scenarios to assess uncertainty, an approach that has many problems. Using stochastic forecasting, we find a 95 percent probability that Medicare spending in 2075 will fall between 4 percent and 18 percent of GDP, indicating a wide band of uncertainty. Although there is substantial uncertainty about future mortality decline, it contributed little to uncertainty about future Medicare spending, since lower mortality both raises the number of elderly, tending to raise spending, and is associated with improved health of the elderly, tending to reduce spending. Uncertainty about fertility, by contrast, leads to great uncertainty about the future size of the labor force, and therefore adds importantly to uncertainty about the health-share of GDP. In the shorter term, the major source of uncertainty is health spending per capita. CONCLUSIONS: History is a valuable guide for quantifying our uncertainty about future health expenditures. The probabilistic model we present has several advantages over the high-low scenario approach to forecasting. It indicates great uncertainty about future Medicare expenditures relative to GDP.