Abstract
This article presents data on health care spending for 30 OECD countries from OECD Health Data 2003, the latest edition of OECD's annual data collection on health systems across industrialized countries. OECD data show health care expenditures as a proportion of gross domestic product at an all-time high, due to both increased expenditures and overall economic slowdown. The article discusses similarities and differences across countries in how health care expenditures are funded and how the health care dollar is spent among types of services.
Introduction
OECD countries are currently spending record amounts on health care. In 2001, they spent an average 8.4 percent of their GDP on health care, up by 0.3 percentage points from 2000. Pressures for further growth arise from rapid advances in medical technologies, population aging, and rising public expectations. OECD data show that health care spending has outpaced economic growth over the past decade, even before the economic downturn of 2001. The latest increase in expenditure ratios, therefore, comes as no surprise. In fact, it was anticipated by several authors for individual countries, e.g., the U.S. (Heffler et al., 2003) and for Canada (Canadian Institute for Health Information, 2003).
Over the 1990s the gap between health spending growth and economic growth rates was roughly 1 percent for OECD countries on average, on a per-capita basis. In 2001, the latest year available for international comparisons, health care spending growth has accelerated in several OECD countries, including the U.S. (Levit et al., 2003) where it was above the unweighted OECD average.
The pressure on public budgets from accelerated health care spending has been a major policy concern in OECD countries during the past two decades (Docteur and Oxley, 2003; Imai, 2002; Mossialos and Le Grand, 1999; Ranade, 1998; Saltman and Figueras, 1997). Recent economic slowdown and a new upsurge in health care spending, especially in the U.S. has prompted a new round of discussions about desirable health policies to influence aggregate health care spending (Altman et al., 2003; Cutler, 2002).
A common approach of public health care policy in OECD countries has been to combine cost-containment strategies with long-term structural change to improve value-for-money in health care (Docteur and Oxley, 2003; Organisation for Economic Co-operation and Development, 1995). In Sweden, for example, one of the major tools for cost containment was downscaling in the hospital sector and decreasing in the number of health care personnel. Sweden is also among the few OECD countries where the number of physicians per 1,000 population did not increase during the 1990s.1 But it is cost-containment measures that are often the more visible part of reforms, and those which, in many cases, directly affect households who pay for higher cost sharing, or for goods and services that are no longer reimbursed under public programs (Ros, Groenewegen, and Delnoij, 2000). Among the most recent examples is the current reform proposal in Germany (Financial Times, 2003). A central part of the German reform proposal, recently enacted and due to be implemented at the beginning of next year, is a shift of health care expenditures to private financing; for example, consumers will face higher cost sharing for prescription drugs and dental care.
In several countries, an important feature of the changes of health care financing in recent years has been a reduction in the autonomy granted to social insurance regimes to simply pass through higher costs into higher compulsory contributions. This has been the case in the Czech Republic, France, Germany, and Hungary. Because of the depressive effect on employment that could result from higher employer paid social charges, the control of contribution rates has become an explicit policy target. In order to reconcile this with the financial viability of insurance regimes, three related strategies have been followed by governments: (1) impose budget constraints on providers, (2) require individuals to bear a greater share of expenditures, through increasing copayments, and (3) ensure that access to care remains available to the poor (general taxation has financed a growing proportion of care, particularly by financing copayments for those on low incomes). France has introduced municipal social insurance specifically to address this last point (Imai, Jacobzone, and Lenain, 2000).
Current problems in many countries, however, show that strong control on public spending on health care might lead to difficulties in terms of other policy goals (Docteur and Oxley, 2003). Canada, Denmark, United Kingdom, and the U.S. are currently experiencing shortages of nurses and even physicians.
In Canada, the declining Federal health transfers put a strain on provincial health care systems (Matteo, 2000). During 4 years in the mid-1990s, real total health care spending in Canada fell. This coincided with a decline in the satisfaction with the health care system. For instance, the proportion of people saying that the health care system needed only minor changes dropped from 56 percent in 1988 to 20 percent in 1998. Concerns about underfunding, system administration, and access to specialty care were among the main public concerns (Donelan et al., 1999). Following this period of restraint, public spending increased by an annual rate of 5.1 percent between 1997 and 2001. Since 1998 public sector spending grew faster than that from private sources, and its share was about 73 percent of the total in 2001.
The growth rate of total health care expenditures abated in the U.S. too, during the period of 1992-1999. While average growth rate of total health care expenditures was 5.5 percent in the 1980s (2.5 times higher than GDP growth), it was only 2.5 percent between 1992 and 1999.2 This slow-down is generally seen as due to managed care replacing indemnity insurance as the primary form of private health insurance. Managed care, coupled with robust economic growth, led to an unprecedented stability in the health expenditure share of GDP over this 7-year period (Cowan, et al., 2001). While governments in other countries managed to lower prices for providers unilaterally, a major tool of managed-care insurers was to exclude providers from their network. “As a result, lower prices came along with constrained access to providers in the United States, where it did not in other countries.” (Cutler, 2002).
Consumers in OECD countries are experiencing considerable waiting times for elective surgery (Hurst and Siciliani, 2003) and increasing cost sharing. In a recent survey, shortages of medical personnel, waiting times, and inadequate government funding led the list of concerns in Australia, Canada, New Zealand, and the United Kingdom; high costs and inadequate coverage topped the list for the U.S. (Blendon et al., 2003). Furthermore, a wave of recent medical and technological advances and rising patients' expectations can be expected to put increased pressure on public expenditure on health in the near future.
Trends in Expenditure Growth Relative to GDP
For OECD countries on average, the share of GDP devoted to health care increased markedly in 2001 after a period of relatively stable health care expenditures ratios (Table 1 and Figure 1). This is partially due to slow economic growth. In 2001, OECD countries spent an additional 1.1 percent of GDP on health care compared to 1990, bringing the average up to 8.4 percent.3
Table 1. Total Health Care Expenditures as a Percent of Gross Domestic Product, by Country: 1970-2001.
| Country | 1970 | 1980 | 1990 | 1993 | 1998 | 2000 | 2001 |
|---|---|---|---|---|---|---|---|
|
| |||||||
| Percent | |||||||
| Australia | 5.6 (1971) | 7.0 | 7.8 | 8.2 | 8.6 | 8.9 | — |
| Austria | 5.3 | 7.6 | 7.1 | 7.9 | 7.7 | 7.7 | 7.7 |
| Belgium | 4.0 | 6.4 | 7.4 | 8.1 | 8.4 | 8.6 | 9.0 |
| Canada | 7.0 | 7.1 | 9.0 | 9.9 | 9.1 | 9.2 | 9.7 |
| Czech Republic | — | — | 5.0 | 7.2 | 7.1 | 7.1 | 7.3 |
| Denmark | 8.0 (1971) | 9.1 | 8.5 | 8.8 | 8.4 | 8.3 | 8.6 |
| Finland | 5.6 | 6.4 | 7.8 | 8.3 | 6.9 | 6.7 | 7.0 |
| France | — | — | 8.6 | 9.4 | 9.3 | 9.3 | 9.5 |
| Germany1 | 6.2 | 8.7 | 9.9 (1992) | 9.9 | 10.6 | 10.6 | 10.7 |
| Greece | 6.1 | 6.6 | 7.4 | 8.8 | 9.4 | 9.4 | 9.4 |
| Hungary | — | — | 7.1 (1991) | 7.7 | 6.9 | 6.7 | 6.8 |
| Iceland | 4.7 | 6.2 | 8.0 | 8.5 | 8.6 | 9.3 | 9.2 |
| Ireland | 5.1 | 8.4 | 6.1 | 7.0 | 6.2 | 6.4 | 6.5 |
| Italy | — | — | 8.0 | 8.1 | 7.7 | 8.2 | 8.4 |
| Japan | 4.5 | 6.4 | 5.9 | 6.4 | 7.1 | 7.6 | — |
| Korea | — | — | 4.8 | 4.7 | 5.1 | 5.9 | — |
| Luxembourg | 3.6 | 5.9 | 6.1 | 6.2 | 5.8 | 5.6 | — |
| Mexico | — | — | 4.5 | 6.1 | 5.2 | 5.6 | 6.6 |
| Netherlands | 6.9 (1972) | 7.5 | 8.0 | 8.5 | 8.6 | 8.6 | 8.9 |
| New Zealand | 5.1 | 5.9 | 6.9 | 7.2 | 8.0 | 8.0 | 8.2 |
| Norway | 4.4 | 6.9 | 7.7 | 8.0 | 8.5 | 7.7 | 8.3 |
| Poland | — | — | 5.3 | 6.4 | 6.4 | 6.0 | 6.3 |
| Portugal | 2.6 | 5.6 | 6.2 | 7.3 | 8.6 | 9.0 | 9.2 |
| Slovak Republic | — | — | — | — | 5.8 | 5.7 | 5.7 |
| Spain | 3.6 | 5.4 | 6.7 | 7.5 | 7.5 | 7.5 | 7.5 |
| Sweden | 6.7 | 8.8 | 8.2 | 8.6 | 8.3 | 8.4 | 8.7 |
| Switzerland | 5.6 | 7.6 | 8.5 | 9.6 | 10.6 | 10.7 | 10.9 |
| Turkey | 2.4 | 3.3 | 3.6 | 3.7 | 4.8 | 4.8 (1998) | — |
| United Kingdom | 4.5 | 5.6 | 6.0 | 6.9 | 6.9 | 7.3 | 7.6 |
| United States | 6.9 | 8.7 | 11.9 | 13.3 | 13.0 | 13.1 | 13.9 |
| OECD Average Countries (28)2 | NA | NA | 7.3 | 8.0 | 8.0 | 8.1 | 8.4 |
| OECD Average Countries (18)3 | 5.3 | 7.0 | 7.6 | 8.3 | 8.3 | 8.4 | 8.6 |
| European Union Average Countries (14)4 | NA | NA | 7.6 | 8.2 | 8.2 | 8.3 | 8.5 |
For all years preceding 1990, data for Germany refer to West Germany.
The average excludes the Slovak Republic and Turkey. The 2001 average includes 2000 figures for Australia, Japan, Korea, and Luxembourg.
The average excludes Belgium, Czech Republic, France, Hungary, Italy, Korea, Mexico, Netherlands, Poland, Slovak Republic, Switzerland, and Turkey.
The average includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Portugal, Spain, Sweden, and the United Kingdom.
NOTES: OECD is Organisation for Economic Co-operation and Development. NA is not available. Numbers in parentheses are the number of countries for which data are available. Not all countries report data for the years shown in column headers. Where this is the case, closest available year, shown in parentheses, has been used.
Figure 1. Total Health Care Expenditures as a Percent of Gross Domestic Product: 1980-2001.
The U.S. devoted the highest share of GDP to health throughout the decade, increasing to 13.7 percent in 2001. Internationally harmonized expenditure ratios for the U.S. differ slightly from those published by CMS. The OECD Secretariat reports internationally harmonized U.S. GDP that is 0.6 percent lower than that published by the U.S. Department of Commerce, Bureau of Economic Analysis. Moreover, the OECD definition for total health care expenditures excludes some small spending items, such as research and development, resulting in total health care spending which, for 2001, is 2.3 percent lower than that reported nationally. Detailed documentation of national data sources and estimation methods used in health accounts is available as part of the OECD information system (Organisation for Economic Co-operation and Development, 2003a). Following the U.S. in 2001 was Switzerland spending 10.9 percent, and Germany spending 10.7 percent of GDP on health care. At the other end of the scale, the Slovak Republic and Korea spent less than 6 percent of GDP on health care (Figure 2).4
Figure 2. Health Care Expenditures as a Percent of Gross Domestic Product (GDP): 2001.
Studying the growth patterns of health expenditure and GDP separately provides further insight into international variations in the trend in health care expenditures ratios. In Table 2, both components have been expressed in per capita and in real terms, using the same GDP deflator.5 The margin by which health care expenditures growth outpaced GDP growth can be read from Figure 3 by the relative distance from the diagonal line. This diagonal delimits the sample of countries with faster growth of per-capita health care spending than GDP growth.
Table 2. Growth of Per Capita Expenditures on Health Care Compared to Gross Domestic Product (GDP) Growth, by Country: 1990-2001.
| Country | 1990-2000 Real Annual Growth Rate | Ratio of Total Health Care Expenditures Growth to GDP Growth | 2000-2001 Real Annual Growth Rate | 2001 Real Per Capita Health Care Expenditures 1990=100 | ||
|---|---|---|---|---|---|---|
|
|
|
|||||
| GDP | Care Expenditures | GDP | Total Health Care Expenditures | |||
| Korea | 5.2 | 7.4 | 1.42 | 2.3 | — | — |
| Ireland | 6.4 | 6.8 | 1.06 | 4.2 | 5.7 | 203 |
| Portugal | 2.5 | 6.4 | 2.56 | 1.0 | 2.9 | 191 |
| Poland | 3.5 | 4.8 | 1.37 | 1.0 | 6.6 | 171 |
| Greece | 2.0 | 4.5 | 2.25 | 0.1 | -0.7 | 154 |
| United Kingdom | 2.1 | 4.0 | 1.90 | 1.6 | 5.8 | 157 |
| Czech Republic | 0.2 | 3.9 | 19.50 | 4.1 | 6.4 | 156 |
| Australia | 2.4 | 3.8 | 1.58 | 2.5 | — | — |
| Japan | 1.1 | 3.8 | 3.45 | 0.1 | — | — |
| Mexico | 1.7 | 3.8 | 2.24 | -1.7 | 16.5 | 169 |
| Spain | 2.4 | 3.5 | 1.46 | 1.8 | 2.7 | 145 |
| Belgium | 1.9 | 3.4 | 1.79 | 0.4 | 4.5 | 146 |
| Iceland | 1.6 | 3.1 | 1.94 | 1.7 | 0.5 | 136 |
| Luxembourg | 3.9 | 3.0 | 0.77 | 0.1 | — | — |
| Netherlands | 2.3 | 3.0 | 1.30 | 0.5 | 4.0 | 140 |
| United States | 2.0 | 3.0 | 1.50 | -0.7 | 5.1 | 141 |
| Norway | 3.0 | 2.9 | 0.97 | 0.9 | 6.3 | 141 |
| Austria | 1.9 | 2.8 | 1.47 | 0.4 | 0.4 | 132 |
| New Zealand | 1.4 | 2.8 | 2.00 | 2.7 | 4.5 | 138 |
| Switzerland | 0.2 | 2.5 | 12.50 | 0.2 | 1.9 | 130 |
| France | 1.5 | 2.4 | 1.60 | 1.3 | 3.5 | 131 |
| Germany (1992-2000) | 1.2 | 2.1 | 1.75 | 0.4 | 1.7 | 130 |
| Canada | 1.8 | 1.9 | 1.06 | 0.3 | 6.2 | 129 |
| Denmark | 1.9 | 1.8 | 0.95 | 1.1 | 3.8 | 123 |
| Sweden | 1.6 | 1.8 | 1.13 | 0.8 | 4.7 | 126 |
| Hungary (1991-2000) | 2.5 | 1.7 | 0.68 | 4.1 | 5.5 | — |
| Italy | 1.4 | 1.6 | 1.14 | 1.7 | 4.6 | 122 |
| Finland | 1.7 | 0.1 | 0.06 | 0.4 | 4.6 | 106 |
| Slovak Republic | — | — | — | 3.5 | 3.4 | — |
| OECD Average Countries (28)1 | 2.2 | 3.3 | 1.51 | — | — | — |
| OECD Average Countries (24)2 | 2.0 | 3.1 | 1.53 | 1.2 | 4.5 | — |
| European Union Average Countries3 | 2.2 | 3.2 | 1.44 | 1.1 | 3.4 | — |
The average excludes the Slovak Republic and Turkey.
The average excludes Australia, Japan, Korea, Luxembourg, Slovak Republic, and Turkey.
The average includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Portugal, Spain, Sweden, and the United Kingdom.
NOTES: For Germany, the average annual growth rate is calculated for the period of 1992-2001; for Hungary for 1991-2001. OECD is Organisation for Economic Co-operation and Development.
Figure 3. Increase in Per Capita Health Care Expenditures and Gross Domestic Product (GDP): 1990-2000.
For an (unweighted) average of 24 countries, there was a gap of 1 percentage point between the average annual growth of per-capita GDP and per-capita health care spending (3.1 versus 2.0 percent). In other words, the annual increase in per capita spending on health care across OECD countries has outpaced overall economic growth per capita by around 50 percent over the past decade.
For health care expenditures trends in OECD countries, the last decade can be roughly divided into three different periods in terms of health care expenditures growth rate and health care expenditures ratio to GDP (Table 3).6 The first 3 years of the decade (1990 to 1992) saw considerably higher growth than the 5-year period from 1993 to 1997, when governments in many countries applied cost-containment measures (Anell and Svarvar, 1999; Häkkinen, 1999; Mossialos and Le Grand, 1999; Orosz and Burns, 2000). This is also reflected in the health care expenditures ratio to GDP. For OECD countries on average, it remained flat between 1993 and 1998 (Table 1).
Table 3. Growth of Per Capita Expenditures on Health Care in Real Terms: 1970-2001.
| Country | 1970-1980 | 1980-1990 | 1990-1992 | 1992-1997 | 1997-2001 | 1990-2001 |
|---|---|---|---|---|---|---|
|
| ||||||
| Percent Change | ||||||
| Australia | 5.2 (1969-1980) | 2.6 | 3.1 | 3.9 | 4.0a | 3.8 |
| Austria | 7.4 | 1.4 | 4.6 | 1.4 | 3.0 | 2.6 |
| Belgium | 8.1 | 3.4 | 4.7 | 2.7 | 3.9 | 3.5 |
| Canada | 3.2 | 4.0 | 3.5 | -0.3 | 5.1 | 2.3 |
| Czech Republic | — | — | -2.1 | 8.0 | 2.6 | 4.1 |
| Denmark | 2.9 (1971-1980) | 0.8 | 0.3 | 1.7 | 3.0 | 1.9 |
| Finland | 4.6 | 4.8 | 2.0 | -1.4 | 2.2 | 0.5 |
| France | — | — | 3.6 | 1.5 | 3.1 | 2.5 |
| Germany | 6.2 | 1.8 | — | 2.2 | 1.8 | 2.0 (1992-2001) |
| Greece | 4.5 | 1.3 | 4.4 | 5.0 | 2.5 | 4.0 |
| Hungary | — | — | — | 0.1 | 4.1 | 2.1 (1991-2001) |
| Iceland | 8.3 | 4.2 | -0.6 | 1.8 | 5.9 | 2.8 |
| Ireland | 8.5 | 0.1 | 9.5 | 4.8 | 7.6 | 6.7 |
| Italy | — | — | 3.3 | -0.4 | 4.0 | 1.9 |
| Japan | 7.1 | 2.6 | 4.0 | 3.4 | 14.2 | 3.8 |
| Korea | — | — | 5.8 | 7.1 | 19.0 | 7.4 |
| Luxembourg | 7.2 | 4.8 | 4.1 | 1.9 | 14.1 | 3.0 |
| Mexico | — | — | 11.3 | 0.4 | 7.4 | 4.9 |
| Netherlands | — | 2.3 | 3.6 | 1.5 | 4.9 | 3.1 |
| New Zealand | 2.1 | 2.9 | 1.5 | 2.6 | 4.2 | 3.0 |
| Norway | 9.1 | 3.1 | 5.6 | 3.2 | 2.1 | 3.2 |
| Poland | — | — | 9.1 | 3.9 | 4.4 | 5.0 |
| Portugal | 11.5 | 4.2 | 8.7 | 6.2 | 4.7 | 6.1 |
| Slovak Republic | — | — | — | — | 1.8 | — |
| Spain | 6.9 | 4.7 | 5.6 | 2.6 | 3.4 | 3.4 |
| Sweden | 4.4 | 1.1 | -1.3 | 1.3 | 4.8 | 2.1 |
| Switzerland | 4.1 | 2.7 | 4.0 | 1.6 | 2.6 | 2.4 |
| Turkey | — | 3.6 | 3.5 | 5.2 | — | 6.1 (1990-1998) |
| United Kingdom | 4.1 | 3.2 | 6.3 | 2.8 | 4.9 | 4.2 |
| United States | 4.5 | 5.5 | 4.4 | 2.3 | 3.7 | 3.2 |
| OECD Average Countries (28)2 | NA | NA | 4.2 | 2.6 | 4.2 | 3.4 |
| OECD Average Countries (18)3 | 6.0 | 3.0 | 3.9 | 2.5 | 4.0 | 3.3 |
For those countries not reporting 2001 figures the growth rates cover the period up to 2000.
The average excludes the Slovak Republic and Turkey.
The average excludes Belgium, France, Hungary, Italy, Korea, Mexico, Netherlands, Poland, Slovak Republic, Switzerland, and Turkey.
NOTES: Real expenditures are adjusted for gross domestic product deflator. For Germany, the average annual growth rate is calculated for the period of 1992-2001; for Hungary for 1991-2001; and for Turkey for 1990-1998. OECD is Organisation for Economic Co-operation and Development. NA is not available. Numbers in parentheses are the number of countries that OECD had data for. Not all countries report data for the years shown in column headers. Where this is the case, closest available year, shown in parentheses for which data are available.
Health care expenditures started to rise again rapidly at the end of the 1990s and in the beginning of this decade, reflecting deliberate policies in some countries to relieve pressures arising from cost containment in previous years. An example in case is the policy of high real rates of increase over a number of years in the United Kingdom (Towse and Sussex, 2000). It seems that an observation made about the U.S. health care system might hold true for many other countries: “The wide range and sharp periodic cycles in spending growth produce disproportionate strains that contribute to the perception of a health system in constant crisis” (Altman et al., 2003).
Behind the average OECD growth rate there are wide variations, Table 2 shows the OECD countries in order of their health care expenditures growth rates. Several countries (e.g., Korea, Ireland, and Portugal) with lower income and lower health care expenditures per capita in 1990 experienced high growth in health care expenditures during the 1990s (Colombo and Hurst, 2002). As a result, they narrowed the gap with the OECD average both in terms of per-capita expenditure and health care expenditures share of GDP. At the beginning of this decade, health care expenditures per capita in these countries was 50-100 percent higher than in 1990 (Table 2). A few high-income countries (Japan, Australia, and United Kingdom) also experienced strong growth in health care expenditures over the past decade.
Ireland experienced high growth in both health care spending and GDP (6.8 and 6.4 percent per year), and consequently the share of health care expenditures in GDP increased only slightly. Despite the high growth in health care spending, there was only a modest increase in services. “It is important to recognize that a significant part of the increase is due to factors driving up the costs of health care without increasing the level of service provision” (Deloitte & Touche, 2001). The rapid growth of the Irish economy in the 1990s caused labor shortages in a number of sectors. This also put an upward pressure on labor costs in the health care sector, and led to significant real increases in average wages for all categories of health care staff.
The United Kingdom underfunding of the health care system resulted in growing dissatisfaction by the end of the 1980s. In 1991-1992, in order to oil the wheels of major health care reform, the Tory-government considerably increased public expenditure on health care (as an average by 5.2 percent). Total expenditure grew by 6.2 percent per year. Then, between 1992 and 1998, the government exerted a strong cost-containment policy again (Koen, 2000); and the growth rate of total health care expenditures was only 2.6 percent (which is below the OECD average). Since 2000, the Labour-government has given a higher priority to the national health statistics (NHS): In January 2000 Britain's Prime Minister declared there would be an increase in spending on the NHS in order to reach the European Union (EU) average measured by the proportion of GDP spent on health care by 2006 (Department of Health, 2000; Towse and Sussex, 2000; Ferriman, 2000). More recently, in mid-2002 after a review of the long-term trends affecting the NHS (Wanless, 2002) the Chancellor confirmed that there would be a 43-percent increase in real terms in health spending over the next 5 years (that is more than 7 percent annual average growth). A public service agreement published by the Department of Health outlined the improvements that patients could expect, including reduced waiting times for hospital outpatient appointments to maximum 3 months and inpatient appointments to 6 months by 2005 (Coomber, 2002).
On the other hand, 12 OECD countries had below-average health care expenditures growth during the past decade (Table 2). Among these countries two groups can be distinguished, taking into consideration GDP growth. In several countries (e.g., Switzerland, France, and Germany) health care expenditures still grew faster than the economy, resulting in a considerable increase in the ratio of health care spending to GDP (Table 1). In other countries, low health care expenditures growth between 1990 and 2000 went together with a similar or somewhat higher GDP growth, resulting in a decrease in the ratio of health care spending to GDP in Finland and Hungary and a stabilization of the ratio in Canada, Italy, and Sweden.
Table 2 shows the proportional gap in real growth rates of GDP and health care expenditures during the 1990s. In the U.S. it was 50 percent, which is close to the OECD average. It is interesting to note that while the real health care expenditures growth rate was slightly slower in the U.S. than in the EU during the 1990s (3.0 percent compared to 3.2 percent), the gap between health expenditure and GDP growth was somewhat higher in the U.S. (50 percent compared to 40 percent). However, at the beginning of this decade both real health care spending growth and the gap in growth rates in the U.S. has again considerably exceeded the EU average, and even the OECD average (Table 2).
The phenomenon of excess growth prevalent in countries whose health care expenditures ratio was relatively low in 1990 (Figure 4), has led to some convergence of expenditure ratios. This figure plots the excess growth of health over GDP with the share of health care expenditures in 1990, the beginning of the time period studied in this graph. Countries at the lower end of the health care expenditures ratios tend to have higher excess growth rates, whereas several countries at the higher end of the scale had low or no excess growth in health care spending over the GDP (for example, Denmark and Canada). This pattern is not unambiguous: the three countries with high expenditure ratios in 1990 (Germany, Switzerland, and the U.S.) had relatively high excess growth of health.
Figure 4. Excess Growth in Total Health Care Expenditures Per Capita: 1990-2000.
Per Capita Expenditure on Health Care
Health care expenditures per capita converted to US$ purchasing power parity (PPP)7 is commonly used to compare the overall level of consumption of health care goods and services across countries. According to this measure, the U.S. continues to spend far more on a per capita basis for health care than any other country. It spent over US$4,880 per capita on health care in 2001—more than twice the average of around US$2,080 PPP across OECD countries (Figure 5). Next in this ranking for 2001 come Switzerland, Norway, Germany, and Canada; and at the other end of the scale, Mexico, Poland, Slovak Republic, Korea, and Hungary spent less than US$1,000 on health care.
Figure 5. Total Health Care Expenditures Per Capita and as a Percent of Gross Domestic Product (GDP): 2001.
Figure 5 shows per capita expenditure and expenditure as share of GDP together. It is evident that differences in per capita values are far greater than in health care expenditures as percent of GDP. The figure also reflects that, depending on economic development, countries having a high share of health care expenditures to GDP ratio might have low per capita expenditure, and vice versa. For example, Greece and France both spent around 9.5 percent of GDP on health care, but health care expenditures per capita in France was 70 percent higher.
Differences in health care spending across countries are greater than differences in GDP per capita (Table 4). For instance, in 2001, GDP per capita in the U.S. was 40 percent higher than the OECD average, while expenditure on health care was 135 percent greater. Most of the lower income OECD countries (Korea, Czech Republic, Hungary, Slovak Republic, Poland, Mexico, and Turkey) see greater deviations from the OECD average in relation to health care expenditures per capita than for GDP per capita. Over the past decade, however, the lower income OECD countries, with the only exception of Hungary, narrowed their gap from the OECD average, both in terms of total and public expenditure on health.
Table 4. Per Capita Gross Domestic Product (GDP) and Total Health Care Expenditures, by Country: 2001.
| Country | OECD Average=100 GDP | OECD Average=100 Total Health Expenditure | Per Capita US$ PPP Total Health Expenditure |
|---|---|---|---|
| OECD Average Countries1 | 100 | 100 | $2,080 |
| Luxembourg | 194 | 131 | 2,719 |
| Norway | 146 | 145 | 3,012 |
| United States | 140 | 235 | 4,887 |
| Ireland | 120 | 93 | 1,935 |
| Switzerland | 119 | 156 | 3,248 |
| Netherlands | 117 | 126 | 2,626 |
| Denmark | 117 | 120 | 2,503 |
| Iceland | 115 | 127 | 2,643 |
| Canada | 115 | 134 | 2,792 |
| Austria | 113 | 105 | 2,191 |
| Belgium | 111 | 120 | 2,490 |
| Australia | 109 | 113 | 2,350 |
| France | 107 | 123 | 2,561 |
| Japan | 106 | 95 | 1,984 |
| Finland | 106 | 88 | 1,841 |
| Italy | 105 | 106 | 2,212 |
| United Kingdom | 105 | 96 | 1,992 |
| Germany | 105 | 135 | 2,808 |
| Sweden | 104 | 109 | 2,270 |
| Spain | 85 | 77 | 1,600 |
| New Zealand | 84 | 83 | 1,733 |
| Portugal | 70 | 78 | 1,613 |
| Greece | 64 | 73 | 1,511 |
| Korea | 63 | 43 | 893 |
| Czech Republic | 60 | 53 | 1,106 |
| Hungary | 54 | 44 | 911 |
| Slovak Republic | 48 | 33 | 682 |
| Poland | 40 | 30 | 629 |
| Mexico | 36 | 28 | 586 |
| Turkey | 23 | — | — |
The average excludes Turkey.
NOTES: OECD is Organisation for Economic Co-operation and Development. PPP is purchasing power parity. Figures for Luxembourg, Australia, Japan, and Korea are for 2000 rather than 2001.
For OECD countries on average, the statistical significance of a simple regression relationship between growth rates in per capita health care spending and per capita GDP has declined during the 1990s (Huber, 1999). This can be seen with the help of the scatter diagram in Figure 3. If the cluster of countries that excludes the two outliers of Korea and Ireland (both saw exceptional health care expenditures and GDP growth during the 1990s) is studied separately, the correlation between GDP growth and health care expenditures growth is not significantly different from zero.8
Trends in Health Care Funding
In all countries, health care is financed through a mixture of publicly-funded benefits and services, private social provision (largely employer-sponsored social insurance, but also some cooperative mutual insurance) and direct private purchase of medical services, pharmaceuticals and appliances, plus private voluntary insurance.
Public third-party payment arrangements are either expenditures from general government revenues or based on social insurance systems. Although the U.S. health care system is thought of as primarily privately funded (only about one-quarter of the U.S. population is insured through public programs), the U.S. ranks fourth in the OECD in terms of spending per-capita from public funds, behind Norway, Luxembourg, and Iceland (Docteur, Suppanz, and Woo, 2003).
Private sources of funding comprise out-of-pocket spending, private health insurance (often funded by employers and subsidies by tax exemption), and other private sources. These include direct health benefits such as occupational health care, or charities.
From the view of private households and individual health care consumers, an important boundary line is between out-of-pocket spending and all other health care funding, i.e., the part of health care provided under a third-party payment arrangement, which can be either a public or a private program. According to this definition, out-of-pocket spending includes both over-the-counter and similar direct payment to providers that are not refundable, plus cost sharing of private households. This includes the funding of services and medical goods that are (at least partially) covered under a third-party payment program.
Figure 6 shows how OECD countries are ranked by their increasing share of out-of-pocket spending and by total health care expenditures. The public sector is the main source of health care funding in all OECD countries, except the U.S., Mexico, and Korea. During the 1970s, the public share of health care spending increased in OECD countries on average, but since 1980 has stabilized and even slightly declined in the 1990s. On average, the public share of health care funding accounted for 72 percent in 2001. The public share was more than 80 percent in several countries, including the Czech Republic, Denmark, and the United Kingdom (Table 5 and Figure 6).
Figure 6. Health Care Expenditures1, by Source of Funding: 2000.
1 Countries are ranked by their increasing share of out-of-pocket spending.
NOTE: Not all countries have this data available.
SOURCE: (Organisation for Economic Co-operation and Development, 2003a.)
Table 5. Health Care Expenditures Source of Funding, as a Percent of Total Health Expenditure, by Country: 1990 and 2000.
| Country | Public | 1990 Private | Out of Pocket | Public | 2000 Private | Out of Pocket |
|---|---|---|---|---|---|---|
| Australia | 67 | 33 | 17 | 69 | 31 | 18 |
| Austria | 74 | 27 | — | 70 | 31 | 19 |
| Belgium | — | — | — | 71 | 28 | — |
| Canada | 75 | 26 | 14 | 71 | 29 | 16 |
| Czech Republic | 97 | 3 | 3 | 91 | 9 | 9 |
| Denmark | 83 | 17 | 16 | 83 | 18 | 16 |
| Finland | 81 | 19 | 16 | 75 | 25 | 20 |
| France | 77 | 23 | 11 | 76 | 24 | 10 |
| Germany | 76 | 24 | 11 | 75 | 25 | 11 |
| Greece | 54 | 46 | — | 56 | 44 | — |
| Hungary (1991) | 89 | 11 | 11 | 76 | 25 | 21 |
| Iceland | 87 | 13 | 13 | 84 | 16 | 16 |
| Ireland | 72 | 28 | 16 | 73 | 27 | 13 |
| Italy | 79 | 21 | 15 | 73 | 27 | 23 |
| Japan | 78 | 22 | — | 78 | 22 | 17 |
| Korea | 37 | 63 | 53 | 44 | 56 | 41 |
| Luxembourg | 93 | 7 | 5 | 88 | 11 | 8 |
| Mexico | 43 | 57 | 57 | 48 | 52 | 52 |
| Netherlands | 67 | 33 | — | 63 | 37 | 9 |
| New Zealand | 82 | 18 | 14 | 78 | 22 | 15 |
| Norway | 83 | 17 | 15 | 85 | 15 | 15 |
| Poland | 92 | 8 | — | 71 | 30 | — |
| Portugal | 66 | 35 | — | 69 | 32 | — |
| Slovak Republic | — | — | — | 89 | 11 | 11 |
| Spain (1991) | 79 | 21 | 19 | 72 | 28 | 24 |
| Sweden | 90 | 10 | — | 85 | 15 | — |
| Switzerland | 52 | 48 | 36 | 56 | 44 | 33 |
| Turkey (1998) | 61 | 39 | — | 72 | 28 | — |
| United Kingdom | 84 | 16 | 11 | 81 | 19 | — |
| United States | 40 | 60 | 20 | 44 | 56 | 15 |
| OECD Average Countries (27)1 | 74 | 26 | NA | 72 | 28 | NA |
| OECD Average Countries (19)2 | 73 | 27 | 19 | 72 | 28 | 20 |
Excludes Belgium, Slovak Republic, and Turkey.
Includes Australia, Canada, Czech Republic, Denmark, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, Korea, Luxembourg, Mexico, New Zealand, Norway, Spain, Switzerland, and the United States.
NOTES: Total private includes private insurance, out-of-pocket and other private sources (companies, non-governmental organisations, etc). OECD is Organisation for Economic Co-operation and Development. NA is not available. Figures for Hungary and Spain are for 1991 rather than 1990; and for Turkey for 1998 rather than 2000.
The share of out-of-pocket payments was above 30 percent of total health care expenditures in Switzerland, Korea, and Mexico. It varies between 10 and 30 percent of total health care expenditures for most countries with available data (Table 5). With a few exceptions, there is a tendency for the share of out-of-pocket spending to decline as health care expenditures per capita rises.
Out-of-pocket spending on health care continues to be among the most dynamic components of private consumption in a majority of OECD countries. There are substantial differences between countries in the baskets of goods and services that are paid out of pocket. Pharmaceuticals are one of the major components in all countries. However, countries differ markedly in the share of private spending that is devoted to services, such as denture and long-term care (LTC) in nursing homes and home-help services, also reflecting differences in public coverage of these items.
There is complementarity between public spending and private insurance in several countries. Private insurance can provide both basic coverage for those not covered by public systems or provide complementary insurance for specific services or that part of service cost not covered under public programs. Examples of the first type of private insurance include employer-sponsored private insurance group contracts in the U.S. and private insurance contracts of state employees in Germany. Complementary health care insurance is a common way of financing dental and medical appliances, or privately paid upgrades of hospital accommodation.
Data for a number of countries suggest that out-of-pocket spending for health care rose as a share of total household consumption during the 1990s (Table 6). Of the 19 OECD countries for which this measure is available, all but 4 experienced such an increase; the share remained constant in Denmark and France, and decreased in Korea and the U.S.
Table 6. Out-of-Pocket Payments for Health Care as a Percent of Total Household Consumption of All Goods and Services, by Country: 1990 and 2000.
| Country | 1990 | 2000 |
|---|---|---|
| Australia | 2.2 | 2.7 |
| Austria | — | 2.7 |
| Belgium | — | |
| Canada | 2.4 | 2.7 |
| Czech Republic | 0.3 | 1.2 |
| Denmark | 2.8 | 2.8 |
| Finland | 2.5 | 2.9 |
| France | 1.8 | 1.8 |
| Germany | 1.8 | 2.0 |
| Greece | — | |
| Hungary (1991) | 1.5 | 2.8 |
| Iceland | 1.8 | 2.6 |
| Ireland | 1.8 | 1.9 |
| Italy | 2.1 | 3.1 |
| Japan | — | 2.3 |
| Korea | 4.9 | 4.3 |
| Luxembourg | 0.7 | 1.1 |
| Mexico | 3.7 | 4.3 |
| Netherlands | — | 1.6 |
| New Zealand | 1.7 | 2.1 |
| Norway | 2.4 | 2.7 |
| Poland | — | |
| Portugal | — | |
| Slovak Republic | — | 1.1 |
| Spain (1991) | 2.2 | 3.0 |
| Sweden | — | |
| Switzerland | 5.5 | 6.1 |
| Turkey | — | |
| United Kingdom | 1.1 | — |
| United States | 3.6 | 2.9 |
| OECD Average Countries (19)1 | 2.4 | 2.8 |
Includes Australia, Canada, Czech Republic, Denmark, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, Korea, Luxembourg, Mexico, New Zealand, Norway, Spain, Switzerland, and the United States.
NOTE: Figures for Hungary and Spain are for 1991 rather than 1990.
Type of Service Expenditure
OECD countries differ in the ways health care expenditures are allocated according to type of service provided and medical goods consumed (Figure 7). In 2001, on average across OECD countries, 38 percent of total health care expenditures was allocated to inpatient care, 31 percent for ambulatory services (including ancillary services and home care), 21 percent for medical goods (including pharmaceuticals and medical appliances) and the remaining 10 percent was spent on collective services (administration and general public health prevention programs). But there are significant differences among countries. For example, Denmark, the Netherlands, and Switzerland allocated 45 percent or more of their health care expenditures on inpatient care in 2001, while countries such as the U.S. and Canada spent less than 30 percent on this component of their health care system (Figure 7). Hungary and the Slovak Republic spent almost 40 percent of their total health care expenditures on medical goods (including pharmaceuticals, such as prescription drugs), while Denmark, Switzerland, and the U.S. spent less than 15 percent on this item.
Figure 7. Health Care Expenditures, by Type of Service Provision: 2001.
Figure 7 shows that the relative shares of types of services in overall spending can refer to quite different absolute spending levels in countries. For example, Hungary and the U.S. each spent roughly the same share of their health care expenditures on inpatient care, but in dollar terms the U.S. spent 5.2 times more then Hungary did. Similarly, Hungary devoted 30 percent of its health care expenditures to medical goods, compared to 12 percent in the U.S., but dollar spending in the U.S. was 2.1 times that in Hungary (Figure 7). In fact, the relatively small share of pharmaceutical spending in the U.S. corresponds to the highest per-capita spending in the OECD (Figure 8).
Figure 8. Pharmaceutical Expenditures Per Capita, and as a Percent of Total Health Care Expenditures: 1990-2001.
Reasons for international differences in the distribution of expenditures among provider types can be traced back to several roots. Constant changes and innovation in medical technology, reforms in payment mechanisms, and the search for more efficient allocation of health care resources all act together over time to modify the division of labor in health care across provider industries. This involves complex trends in specialization and integration, increasing the need for better coordination to bring basic services closer to consumers in the community.
Changing Role of Pharmaceutical Spending
Pharmaceutical products represent an important and growing share of health care expenditures in most countries. The number of new drugs increased considerably during the past decade, and the movement toward new, more expensive products has been one of the main driving forces in increasing pharmaceutical expenditure, thereby contributing to the increase in overall health care spending. There are considerable differences in pharmaceutical spending across countries, reflecting differences in volume, structure of consumption, and price level. The U.S. spends the most on pharmaceuticals, with expenditure per capita of US$605 PPP in 2001. France, Italy, Canada, and Germany followed the U.S., with spending of more than US$400 PPP per capita (Figure 8).
On average the annual growth rate of pharmaceutical expenditure was 30 percent higher than that of total health care expenditures during the 1990s resulting in increasing shares of pharmaceuticals in total spending (Figure 8) (Organisation for Economic Co-operation and Development, 2003b). OECD countries at the lower end of the income scale tend to spend a greater share of their health care expenditures on pharmaceuticals, partly because pharmaceuticals have international market prices while labor costs are usually based on national wage structures. For example, Hungary and the Slovak Republic spent around 30 percent of total health care expenditures on pharmaceuticals, while Denmark and the Netherlands spent around 10 percent. The share spent on pharmaceuticals can also be very different in countries having similar health care spending per capita. For example, Denmark spends 9 percent of total health care expenditures on pharmaceuticals while France spends 21 percent (Figure 8), although both have roughly the same total health care spending per capita (Figure 7).
Pharmaceutical expenditure tends to be funded from private sources to a greater extent than inpatient and outpatient services, because copayments tend to be higher on pharmaceuticals and a considerable portion of pharmaceuticals are not covered under public insurance schemes (Organisation for Economic Co-operation and Development, 2003b).
Most OECD countries have been applying a mix of tools to try to control pharmaceutical expenditures over the past two decades. Increased cost sharing for pharmaceuticals has been a common feature (Mossialos, and Le Grand, 1999; Saltman and Figueras, 1997). The number of drugs not reimbursed has increased, mainly comfort drugs or those without proven therapeutic value. The degree of cost sharing has been increased for many others. In a number of cases, flat-rate payments per prescription have been established. Reference price systems have also been introduced in several countries (e.g., Germany, Denmark, and the Netherlands). These arrangements increase cost sharing for individuals using high-cost products while promoting the use of less-costly generic drugs.
Revisions of Health Expenditure Estimates
The reporting on trends in health care spending across countries in a timely, comparable, and policy relevant way needs a constant investment both by the international community and by individual countries to keep national reporting systems up-to-date with rapidly changing health care systems, and to ensure that a core set of expenditure indicators can be reported in an internationally harmonized way for comparative purposes. To facilitate this process, the OECD Secretariat has published an accounting framework which is now used by an increasing number of OECD member and non-member countries (Organisation for Economic Cooperation and Development, 2000).9
OECD member countries are currently at different stages of implementing the SHA manual, and/or of harmonizing their reporting on health care expenditures according to main categories and definitions of the International Classification of Health Accounts (ICHA) as proposed by the SHA (Organisation for Economic Co-operation and Development, 2002). In several countries, the reporting on health care accounts according to the SHA framework is now part of national reporting (e.g., Denmark, Germany, Hungary, Japan, Korea, Mexico, Netherlands, and Switzerland).10 Other countries produce estimates according to the OECD framework, but mainly for purposes of reporting to the OECD health care data collection (e.g., Australia, Canada, France, and the U.S.) and detailed results and comments on estimation methods are made available with the description of the national data sources and estimation methods (Organisation for Economic Co-operation and Development, 2003a). Comparability of data is still restricted for countries where SHA pilots are at an early or experimental stage (e.g., Finland, and the United Kingdom), and where the SHA implementation has not been started (e.g., Austria, , Italy, Portugal, and New Zealand).
But even where results of the detailed tables of the SHA framework are not yet available publicly, some experience with the SHA manual has now been gained in at least 25 of the 30 OECD countries. During this process, statisticians have re-examined their overall expenditure estimates and the basic breakdown according to various dimensions (type of services and goods, industries of providers, and sources of financing). They have also conducted an inventory of available sources for more detailed estimates. As these more detailed estimates are being implemented in a growing number of countries, comparability of health care expenditures estimates is expected to constantly improve in the future.
As a result of this work, the main issues of comparability are now well known. Two of the most significant are the boundary between health care and other social services, in particular for older persons in need of LTC, and the structure and amount of spending from a multitude of private sources. For example, a better estimate of LTC increased the estimate for total expenditure in Sweden by 7.7 percent in 2001. (It meant that the new estimate for total expenditure as a percentage of GDP was 8.7 percent, compared to 8.0 percent before adjustment for LTC.11) The OECD Secretariat currently conducts in-house research on both issues in the framework of a project on LTC policies, and a project on private health insurance (Organisation for Economic Co-operation and Development, 2003a).
Conclusions
There are initial reports from several countries that the trend of accelerated growth is continuing in 2002, which once again brings the discussion of the limits of health care spending growth to the forefront of public policy debate (e.g. Canada, France, Germany, and the U.S.). Evidence of growing health care expenditures ratios has come from preliminary results of national health accounts for Canada, France, and the U.S. (Canada Institute for Health Information, 2003; Fénina and Geoffroy, 2003; Heffler et al., 2003), or from public spending trends that exceed expected GDP growth (German Federal Ministry of Health and Social Security, 2002).
Despite a general convergence of countries' experience over the past decade, the U.S. remains significantly different. The U.S. started the decade with a substantially higher level than other OECD countries—both in absolute terms in per-capita PPP, and as a percent of GDP. During the 1990s, real annual health care spending growth in the U.S. was compared to that of other OECD countries and to the EU average (Table 2). However, the 2000-2001 real health care spending growth in the U.S. was considerably above the EU average, and even the OECD average. In 2001, the U.S. spent more on health care by 2 percentage points of GDP than in 1990 (13.9 percent of GDP compared to 11.9 percent), while on average the EU spent more on health care by less than 1 percentage point of GDP (8.5 percent of GDP compared to 7.6 percent).
In order to present a more complete story about value-for-money that the health care dollar buys, the data presented in this article need to be complemented by additional indicators. It is access to quality services and the ability of a health care system to build confidence that these will be provided in efficient and effective ways, that determine a society's willingness to dedicate a growing share of its overall resources to health care.
In order to be able to suggest how close an OECD country comes to its individual ideal in this respect, more and better data are needed on a macro level. In addition, substantially more work is needed on a more disaggregated level, but in ways that lead to internationally comparable results (Cutler, 2002).
On the aggregate level, work is currently undertaken at the OECD Secretariat to complement the currently available spending data by a more detailed breakdown of spending by type of service. This will help answer questions such as: to what extent is a relatively generous coverage—and high spending—of LTC services (for older persons, but also for younger adults) a common feature of several of the highest spending countries (e.g., in Canada, Germany, and Switzerland)?
An important part of the expenditure story is differences in prices, for both input and output of health-service provision (especially pharmaceutical prices and labor costs). Part of this task, such as a basic data set for comparing income of health professions is also currently on the OECD agenda and can be found at http://www.oecd.org/health. This will help in the future to be better able to decide to which degree differences in health expenditure are due to price differences (Anderson et al., 2003).
There is some evidence that differences in the availability of resources devoted to health care, which are also behind differences in expenditure, have an effect on outcomes (Or, 2000). Countries operating all or parts of their health care system with tightly controlled resources (for example, the hospital sector) may experience waiting lists that are increasingly seen as problematic (Hurst and Siciliani, 2003). On a semi-aggregate level, the spread of technology has been linked to expenditure growth (Moïse, 2003).
Finally, many questions on the relative efficiency of health care provision across countries can only be answered by detailed analysis using data on a much more disaggregated level, such as comparisons based on how certain health problems are tackled (treatment of diseases). The tentative conclusion from this type of study seems again to be that there is indeed some evidence that patients in the highest spending countries have some benefit from relative high spending (Organisation for Economic Co-operation and Development, 2003c). The main challenge for further work remains to build better data bridges between microdata and macrodata on health care activities, to find out more information about the most effective ways to spend additional health dollars and to understand better how technological progress contributes to both increasing cost and improved outcomes.
Acknowledgments
The authors would like to acknowledge the many individuals and organisations that have contributed to the development of OECD Health Data, in particular the network of correspondents to the OECD database, and the experts on health accounts in member countries who are implementing national versions of the OECD System of Health Accounts. We are grateful to David Morgan for statistical assistance and to Marianne Scarborough for help with editing. The authors wish to thank Jeremy Hurst, Peter Scherer, and Andy Thompson for inputs and comments to earlier versions of this article, and to Patrick Hennessy for his comments on the final version.
Footnotes
The authors are with the Organisation for Economic Co-operation and Development (OECD). The research in this article was supported by the Centers for Medicare & Medicaid Services (CMS) under HCFA Contract Number 500-00-0010. The views expressed in this article are those of the authors and do not necessarily reflect the views of the OECD Secretariat or CMS.
NOTE: This is an update of previous articles on spending trends (Huber 1999; Schieber, Poullier and Greenwald, 1992). It focuses on expenditure trends since 1990 and on comparisons with recent experience in the U.S.
This ratio stayed the same in 2000 as the OECD average, while in 1990 it was 20 percent higher.
Calculated at constant, 1995 GDP price level.
Data availability influences the number of countries than can be included in calculating OECD averages for different time periods. Comparable data for the last three decades were available only in 18 OECD countries, and in 28 countries for the period of 1990 to 2000. Data of 2001 have been reported to the OECD for 24 OECD countries until August 2003.
Luxembourg also has a low ratio of health spending to GDP, but data comparability for this small country is limited. This is mainly due to the close integration of its health care system and economy with neighboring countries, which makes cross-border adjustments extremely difficult.
Real growth was calculated using the GDP deflator throughout this article, instead of using health-care specific deflators. The reason for this choice is that countries differ in the construction of national health price indexes to a degree which would distort comparisons of real growth across countries.
A decade is a rather arbitrary construct and might hide the most important features of health expenditure trends. Hence, Tables 1 and 3 also present the characteristic subperiods (or their border years) within the 1990s.
PPP indexes are used to adjust spending levels to reflect the various countries' price level of a fixed basket of goods and services.
The R2 equals 0.07 for a linear relationship for the reduced cluster. The R2 measure is 0.36 if Korea and Ireland are included in the sample.
The spread of core concepts and classifications of the System of Health Accounts (SHA) manual in non-OECD countries has recently been boosted by the publication of a Guide to Producing National Health Accounts with Special Applications for Low-Income and Middle-Income Countries (World Bank, World Health Organisation, and United States Agency for International Development, 2003).
The country lists may not be exhaustive as they only provide a snapshot picture as of summer 2003. The actual status of SHA projects in countries may change quickly, depending on available resources in statistical agencies for work on this task.
OECD data has been revised for Sweden back to 1993.
Reprint Requests: Eva Orosz, OECD Health Policy Unit 2, rue Andre-Pascal, 75775 Paris Cedex 16. E-mail: eva.orosz@oecd.org
References
- Altman SH, Tompkins CP, Eilat E, Glavin MPV. Escalating Health Care Spending: Is It Desirable Or Inevitable? Health Affairs – We b Exclusive. 2003 Jan 8; doi: 10.1377/hlthaff.w3.1. Intenet address: http://www.healthaffairs.org/WebExclusives/Spending_Web_Excl_010803.htm (Accessed 2003) [DOI] [PubMed]
- Anderson G, Reinhardt UE, Hussey PS, Petrosyan V. It's The Prices Stupid Why The United States Is So Different From Other Countries. Health Affairs. 2003 May-Jun;22(3):89–105. doi: 10.1377/hlthaff.22.3.89. [DOI] [PubMed] [Google Scholar]
- Anell A, Svarvar P. Health Care Reforms and Cost Containment in Sweden. In: Mossialos E, LeGrand J, editors. Health Care and Cost Containment in the European Union. Ashgate; Aldershot, Brookfield, Singapore, Sydney: 1999. [Google Scholar]
- Blendon R, Schoen C, DesRoches C, et al. Common Concerns Amid Diverse Systems: Health Care Experiences in Five Countries. Health Affairs. 2003 May-Jun;22(3):106–121. doi: 10.1377/hlthaff.22.3.106. [DOI] [PubMed] [Google Scholar]
- Canadian Institute for Health Information. National Health Expenditure Trends, 1975-2002. Ottawa: 2003. [Google Scholar]
- Centers for Medicare & Medicaid Services. U.S. Government Printing Office; Washington, DC.: Mar 26, 2002. 2002 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplemental Medical Insurance Trust Funds. Internet address: http://cms.hhs.gov/publications/trusteesreport/2002/tr.pdf (Accessed 2003) [Google Scholar]
- Colombo F, Hurst J. Review of the Korean Health Care System. Organisation for Economic Cooperation and Development; Paris, France: 2002. [Google Scholar]
- Coombes R. Chancellor Maps Out Three Year Public Service Spending Plans. BMJ. 2002 Jul 20;325(7356):123. doi: 10.1136/bmj.325.7356.123/a. [DOI] [PMC free article] [PubMed] [Google Scholar]
- Cowan CA, Lazenby HC, Martin AB, et al. National Health Expenditures. Health Care Financing Review. 2001 Summer;22(4):77–110. [PMC free article] [PubMed] [Google Scholar]
- Cutler D. Equality, Efficiency, and Market Fundamentals: The Dynamics of International Medical-Care Reform. Journal of Economic Literature. 2002 Sep;XL:881–906. [Google Scholar]
- Cutler D. Organisation for Economic Cooperation and Development: A Disease-Based Comparison of Health Systems What is Best and at What Cost? Paris, France: 2003. A Framework for Evaluating Medical Care Systems. [Google Scholar]
- Deloitte & Touche (in conjunction with the York Health Economics Consortium) Value for Money Audit of the Irish Health System, The Department of Health & Children. 2001 Internet address: http://www.doh.ie/publications/audvfm.html (Accessed 2003)
- Department of Health. The NHS Has Underfunded for Decades. London, England: 2000. The NHS Plan, 2000. [Google Scholar]
- Docteur E, Oxley H. Health Care Systems: Lessons from the Reform Experience. Organisation for Economic Co-operation and Development; Paris, France: OECD Health Working Papers. (Forthcoming) [Google Scholar]
- Docteur E, Suppanz H, Woo J. Organisation for Economic Cooperation and Development; Paris, France: 2003. The U.S. Health System: An Assessment and Prospective Directions for Reform. Economics Department Working Paper 350. [Google Scholar]
- Donelan K, Blendon RJ, Schoen C, et al. The Cost of Health System Change: Public Discontent in Five Nations. Health Affairs. 1999 May-Jun;18(3):206–216. doi: 10.1377/hlthaff.18.3.206. [DOI] [PubMed] [Google Scholar]
- Fénina A, Geoffroy Y. DREES Document de travail No55. Ministere de la Santé, de Famille et des Personnes Handicapées; Paris, France: 2003. Comptes nationaux de la Santé 2002. [Google Scholar]
- Ferriman A. Blair Promises to Raise Spending on NHS to European Average. BMJ. 2000 Jan 22;320(7229):205. [PMC free article] [PubMed] [Google Scholar]
- Financial Times. 2003 Jul 22;:1. Schröder Victory on Healthcare Reforms. [Google Scholar]
- Bonn, Germany: 2003. German Federal Ministry of Health and Social Security Statistik KV45 2002. Internet address: http://www.bmgs.bund.de/downloads/KV45_4_Quartal_2002.pdf. Accessed 2003. [PubMed] [Google Scholar]
- Häkkinen U. Cost Containment in Finnish Health Care. In: Mossialos E, LeGrand J, editors. Health Care and Cost Containment in the European Union. Ashgate, Aldershot, Brookfield, Singapore, Sydney: 1999. [Google Scholar]
- Heffler S, Smith S, Keehan S, et al. Health Spending Projections for 2002-2012. Health Affairs. 2003 Mar-Apr;22(2):12. doi: 10.1377/hlthaff.w3.54. [DOI] [PubMed] [Google Scholar]
- Huber M. Health Expenditure Trends in OECD Countries, 1970-1997. Health Care Financing Review. 1999 Winter;21(2):99–117. [PMC free article] [PubMed] [Google Scholar]
- Hurst J, Siciliani L. Organisation for Economic Co-operation and Development; Paris, France: 2003. Tackling Excessive Waiting Times for Elective Surgery: A Comparison of Policies in Twelve OECD Countries. OECD Health Working Paper No.6. Internet address: http://www.oecd.org/health (Accessed 2003) [Google Scholar]
- Imai Y. Health Care Reform in Japan. Organisation for Economic Co-operation and Development; Paris, France: 2002. Economics Department Working Paper No. 321. [Google Scholar]
- Imai Y, Jacobzone S, Lenain P. The Changing Health System in France. Organisation for Economic Co-operation and Development; Paris, France: 2000. Economics Department Working Paper No.269. [Google Scholar]
- Koen V. Public Expenditure Reform: The Health Care Sector in the United Kingdom. Organisation for Economic Co-operation Development; Paris, France: 2000. Economics Department Working Paper 256. [Google Scholar]
- Levit K, Smith C, Cowan C, et al. Trends in U.S. Health Care Spending, 2001. Health Affairs. 2003 Jan-Feb;22(1):154–164. doi: 10.1377/hlthaff.22.1.154. [DOI] [PubMed] [Google Scholar]
- Matteo LD. The Determinants of the Public-Private Mix in Canadian Health Care Expenditures: 1975-1996. Health Policy. 2000 Jun;52(2):87–112. doi: 10.1016/s0168-8510(00)00071-3. [DOI] [PubMed] [Google Scholar]
- Moïse P. Organisation for Economic Cooperation and Development: A Disease-based Comparison of Health Systems What is Best and at What Cost? Paris, France: 2003. The Technology-Health Expenditure Link. A Perspective from the Ageing-Related Diseases Study. [Google Scholar]
- Mossialos E, Le Grand J. Cost Containment in the EU: An Overview. In: Mossialos E, Le Grand J, editors. Health Care and Cost Containment in the European Union. Ashgate, Aldershot, Brookfield, Singapore, Sydney: 1999. [Google Scholar]
- Or Z. Exploring the Effects of Health Care on Mortality across OECD Countries, Labour Market and Social Policy. Organisation for Economic Co-operation and Development; Paris, France: 2000. Occasional Paper 46. [Google Scholar]
- Organisation for Economic Co-operation and Development. New Directions in Health Care Policy. Paris, France: 1995. OECD Health Policy Studies No.7. [Google Scholar]
- Organisation for Economic Co-operation and Development. Paris, France: 2000. A System of Health Accounts. Version 1.0. Internet address: www.oecd.org/health/healthdata (Accessed 2003) [Google Scholar]
- Organisation for Economic Co-operation and Development. The State of Implementation of the OECD Manual A System of Health Accounts (SHA); Presented at the Meeting of Experts in National Health Accounts; Paris, France. October 10, 2002; Internet address: www.oecd.org/health/healthda-ta. (Accessed 2003) [Google Scholar]
- Organisation for Economic Co-operation and Development. Paris, France: 2003a. OECD Health Data 2003, CD-ROM and User's Guide. Internet address: www.oecd.org/health/healthdata. (Accessed 2003) [Google Scholar]
- Organisation for Economic Co-operation and Development. Health at a Glance—OECD Indicators 2003. OECD; Paris, France: 2003b. [Google Scholar]
- Organisation for Economic Co-operation and Development. A Disease-based Comparison of Health Systems. What is Best and at What Cost? OECD; Paris, France: 2003c. [Google Scholar]
- Orosz E, Burns A. The Health Care System in Hungary. Organisation for Economic Co-operation and Development; Paris, France: 2000. Economics Department Working Paper No. 241. [Google Scholar]
- Ranade W, editor. Markets and Health Care. Longman; London, England: 1998. [Google Scholar]
- Ros CC, Groenewegen PP, Delnoij DMJ. All Rights Reserved, or Can We Just Copy? Cost Sharing Arrangements and Characteristics of Health Care Systems. Health Policy. 2000 May;52(1):1–13. doi: 10.1016/s0168-8510(00)00065-8. [DOI] [PubMed] [Google Scholar]
- Saltman RB, Figueras J. European Health Care Reform. Analysis of Current Strategies. World Health Organisation; Copenhagen: 1997. [Google Scholar]
- Schieber G, Poullier JP, Greenwald L. U.S. Health Expenditure Performance: An International Comparison and Data Update. Health Care Financing Review. 1992 Summer;13(4):1–80. [PMC free article] [PubMed] [Google Scholar]
- Towse A, Sussex J. Getting UK Health Care Expenditure Up to the European Union Mean-What Does That Mean? BMJ. 2000 Mar 4;320(7235):640–642. doi: 10.1136/bmj.320.7235.640. [DOI] [PMC free article] [PubMed] [Google Scholar]
- Wanless D. Securing Our Future Health; Taking a Long-Term View. H.M. Treasury; London, England: 2002. [Google Scholar]
- World Bank World Health Organisation, The United States Agency for International Development. Guide to Producing National Health Accounts with Special Applications for Low-Income and Middle-Income Countries. Geneva, Switzerland: 2003. [Google Scholar]