Cost Of Healthcare Worldwide
1. Global spending on health rose to nearly 10% of GDP in 2018, equal to $8.3 trillion.
The latest global health spending report by the World Health Organization suggests that global spending on health continues to rise. Average government spending on health was only US$ 9 per capita in 2018, about 1.2% of GDP, and the priority given to health in public spending has been declining between 2000 and 2018.
2. Between 2000 and 2017, health spending in low-income countries grew at 7.8% a year.
Based on healthcare expenditure by country, this growth was greater than middle-income or high-income countries, where health spending grew by about 6.3% a year and 3.5% a year, respectively. In all cases, however, the surge in health spending was higher than GDP growth which was 6.4%, about 6%, and 1.8% a year in low-income, middle-income, and high-income countries, respectively. These figures show that, barring some exceptions, in most parts of the world, health spending is growing faster than the economy.
3. High-income countries represent 81% of global spending on health but have 16% of the world population.
4. For low-income countries, per-capita spending on healthcare was only $40 in 2018.
5. Global public spending on health grew at 4.3% a year between 2000 and 2017, faster than other sources.
6. Out-of-pocket spending exceeded 40% of the total healthcare spending in low and lower middle income countries.
8. Health spending from external aid was $ 16.2 billion in 2018.
What Is Linked With Government Spending
Government spending correlates with national income
We have already pointed out that government expenditure as a share of national income is higher in richer countries. The visualization provides further evidence of the extent of this correlation.
The vertical axis measures GDP per capita , while the horizontal axis measures governments spending as share of GDP. The vertical axis is expressed by default in a logarithmic scale, so that the correlation is easier to appreciate you can change to a linear scale by clicking the Log button.
We can see that there is a strong positive correlation: high-income countries tend to have larger government expenditures as a share of their GDP. And this is also true within world regions .
This correlation reflects the fact that high-income countries tend to have more capacity to extract revenues, which in turn is due to their capacity to implement efficient tax collection systems. In our entry on Taxation we discuss the drivers of tax revenues in detail.
Government spending is an important instrument to reduce inequality
The visualization shows the reduction of inequality that different OECD countries achieve through taxes and transfers.
Generally speaking, countries that achieve the largest redistribution through taxes and transfers tend to be those with the lowest after-tax inequality.
Definition Ofgeneral Government Spending
General government spending provides an indication of the size of government across countries. The large variation in this indicator highlights the variety of countries’ approaches to delivering public goods and services and providing social protection, not necessarily differences in resources spent. This indicator is measured in terms of thousand USD per capita, and as percentage of GDP. All OECD countries compile their data according to the 2008 System of National Accounts .
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A Dozen Facts About The Economics Of The Us Health
The health-care sector is in many ways the most consequential part of the United States economy. It is a fundamental part of peoples lives, supporting their health and well-being. Moreover, it matters because of its economic size and budgetary implications. The health-care sector now employs 11 percent of American workers and accounts for 24 percent of government spending . Health insurance is the largest component of nonwage compensation and health care is one of the largest categories of consumer spending .
A well-functioning health-care sector is therefore a prerequisite for a well-functioning economy. Unfortunately, the problems with U.S. health care are substantial. The United States spends more than other countries without obtaining better health outcomes . Health care is growing as a share of the economy and government budgets in ways that appear unsustainable . This growth has slowed at times health spending as a share of GDP was roughly flat in much of the 1990s, and growth has also slowed to some extent in recent years. But even if expenditures as a share of GDP plateaued at their current level, they would still represent a massive expenditure of resources. Sixty years ago, health care was 5 percent of the U.S. economy, as can be seen in figure A at 17.7 percent in 2018, it was more than three times that.
For More Comparative Health System Data From The Oecd Click Here
A 2015 Commonwealth Fund brief showed that before the major provisions of the Affordable Care Act were introduced the United States had worse outcomes and spent more on health care, largely because of greater use of medical technology and higher prices, compared to other high-income countries.1 By benchmarking the performance of the U.S. health care system against other countries and updating with new data as they become available we can gain important insights into our strengths and weaknesses and help policymakers and delivery system leaders identify areas for improvement.
This analysis is the latest in a series of Commonwealth Fund cross-national comparisons that uses health data from the Organisation for Economic Co-operation and Development to assess U.S. health care system spending, outcomes, risk factors and prevention, utilization, and quality, relative to 10 other high-income countries: Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom. We also compare U.S. performance to that of the OECD average, comprising 36 high-income member countries.
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Health Spending And Public And Private Spending:
While the United States has had above average total spending, its public expenditures are in line with other countries. At 7.4%, of GDP public expenditures in the U.S. on health are only 0.2% above the 15-country average . Conversely, the United States has much more private sector spending as a percentage of GDP. Exhibit 10 illustrates the proportion of public and private spending among the 15 countries. Private health spending accounts for 8.5% of the U.S. GDP, 4 percentage points more than Switzerland , the next largest private sector spender.
Exhibit 9Public Health Expenditure as a Percentage of GDP, U.S. and Selected Countries, 2008
|: Organisation for Economic Co-operation and Development , OECD Health Data, OECD Health Statistics . doi: 10.1787/data-00350-en Notes: Data from Australia and Japan are 2007 data.Figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD estimates.|
Exhibit 10Public and Private Health Expenditures as a Percentage of GDP, U.S. and Selected Countries, 2008
|Organisation for Economic Co-operation and Development , OECD Health Data, OECD Health Statistics . doi: 10.1787/data-00350-en .Notes: Data from Australia and Japan are 2007 data. Figures for Belgium, Canada,|
Exhibit 11Percentage Point Change in Public and Private Health Expenditure as a Share of GDP, U.S. and Selected Countries, 1980 to 2008
Exhibit 12Public Spending on Health as a Percentage of Total Health Expenditure
How We Conducted This Study
This analysis used data from the 2019 release of health statistics compiled by the Organisation for Economic Co-operation and Development , which tracks and reports on a wide range of health system measures across 36 high-income countries. Data were extracted between July and August 2019. While data collected by the OECD reflect the gold standard in international comparisons, one limitation is that data may mask differences in how countries collect their health data. Full details on how indicators were defined, as well as country-level differences in definitions, are available from the OECD.18 The 10 comparator countries included in this comparison represent those that take part in the Commonwealth Funds annual International Health Policy Survey: Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom.19
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Evolution Of General Government ‘health’ Expenditure
In absolute terms, at the level of the EU-27, general government ‘health’ expenditure increased relatively smoothly between 1995 and 2019, amounting to 11.1 % of total expenditure in 1995 and 15.1% in 2019. As a ratio to GDP, EU-27 government health expenditure amounted to 5.9 % of GDP in 1995 and 7.0 % of GDP in 2019. The highest level reported is in 2009, at the onset of the economic crisis, at 7.3 % of GDP, being due to a decrease in nominal GDP and not due to an unusual increase in government expenditure.
Health Spending Per Capita:
Exhibit 1 shows per capita health expenditures for 2008 in U.S. dollars purchasing power parity. Health spending per capita in the United States is much higher than in other countries at least $2,535 dollars, or 51%, higher than Norway, the next largest per capita spender. Furthermore, the United States spends nearly double the average $3,923 for the 15 countries.
Exhibit 1Total Health Expenditure per Capita, U.S. and Selected Countries, 2008
|Organisation for Economic Co-operation and Development , OECD Health Data, OECD Health Statistics . doi: 10.1787/data-00350-en .Notes: Data from Australia and Japan are 2007 data. Figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD estimates. Numbers are PPP adjusted.|
While an increasing GDP per capita is associated with increased health spending, the United States is an outlier, spending more than similarly wealthy countries. Exhibit 2 shows the relationship between a countrys GDP per capita and its per capita health care expenditure.
Exhibit 2Total Health Expenditure per Capita and GDP per Capita, US and Selected Countries, 2008
|Organisation for Economic Co-operation and Development , OECD Health Data, OECD Health Statistics . doi: 10.1787/data-00350-en .Notes: Data from Australia and Japan are 2007 data. Figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD estimates.|
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Fact : Expenditures Are High And Variable For Those With The Poorest Health
Self-reported health is a well-established summary measure of a persons health that reliably correlates with objective health measures like laboratory biomarkers . We use it in figure 5 to explore how the level and variation in health-care expenditures differ across people of varying health conditions.
People enjoying good health are, unsurprisingly, not a major driver of health-care expenditures. Among those who report excellent health, even those at the 90th percentile of expenditures incur only $5,780 in annual spending, not far above the average of $2,350 for that group. On the other end of the spectrum, people who report being in poor health have average health-care expenditures of $26,450.
More striking is the dramatically higher range of expenditure levels for those in poor health. People at the 90th percentile of expenditures have nearly $70,000 spent on their behalf. Conversely, the 10th percentile of those in poor health have just $700 in expenditures, or 100 times less than the 90th percentile.
The group of people who report poor health as well as low health-care expenditures may have health problems that are not resolvable through expensive medical services, but they may also be medically underserved, whether because of a lack of insurance or other reasons . Regardless, health status alone may not always be a good guide to expected expenditures in a given year.
Nhe By State Of Provider 1980
- Between 2009 and 2014, U.S. personal health care spending grew, on average, 3.9 percent per year, with spending in North Dakota growing the fastest and spending in Rhode Island growing the slowest .
- In 2014, Californias personal health care spending was highest in the nation , representing 11.5 percent of total U.S. personal health care spending. Comparing historical state rankings through 2014, California consistently had the highest level of total personal health care spending, together with the highest total population in the nation. Other large states, New York, Texas, Florida, and Pennsylvania, also were among the states with the highest total personal health care spending.
- Wyomings personal health care spending was lowest in the nation , representing just 0.2 percent of total U.S. personal health care spending in 2014. Vermont, Alaska, North Dakota, and South Dakota were also among the states with the lowest personal health care spending in both 2014 and historically. All these states have smaller populations.
- Gross Domestic Product by state measures the value of goods and services produced in each state. Health spending as a share of a states GDP shows the importance of the health care sector in a states economy. As a share of GDP, Maine ranked the highest and Wyoming ranked the lowest in 2014.
For further detail, see health expenditures by state of provider in downloads below.
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Copy The Linklink Copiedhealth Expenditure Per Capita
The level of health spending in a country, covering both individual needs and population health as a whole, and how this changes over time is dependent on a wide range of demographic, social and economic factors, as well as the financing and organisational arrangements of the health system.
In 2018, overall spending on health care in the United States was estimated to be the equivalent of more than 10 000 dollars for each US resident. This amount of expenditure was higher than all other OECD countries by a considerable margin. Switzerland, the next highest spender in the OECD, spent less than 70% of this amount, while the overall average of all OECD countries was less than 40% of the US figure . Many high-income OECD countries, such as Germany, France, Canada and Japan spend only around a half or less of the US per capita spending on health, while the United Kingdom and Italy were around the OECD average. Lowest per capita spenders on health in the OECD were Mexico and Turkey with health expenditure at around a quarter of the OECD average, and levels similar to the key emerging economies such as the Russian Federation, South Africa and Brazil. Latest available figures show that China spent around 20% of the OECD per capita spending level, while both India and Indonesia spent less than 10%.
Note that data for 2018 are based on provisional figures provided by the country or estimated by the OECD Secretariat.
How Much Is Spent On Healthcare Governance And Financing
In 2017, the UK spent the equivalent of £53 per person on healthcare governance and the costs associated with financing healthcare. This was below the median for Organisation for Economic Co-operation and Development countries with comparable data .
For the UK, this spending covers central departmental governance, the regulatory activities of bodies such as the Care Quality Commission, as well as the operating of voluntary health insurance schemes, which include policy management, administrative costs, such as marketing, and profits earned. Governance and financing costs shown in Figure 5 exclude overhead expenses associated with the administration or functioning of healthcare providers, for example hospital management or payroll and procurement administration, which are instead included in other healthcare expenditure categories.
The relatively low UK spending on governance and financing costs is partly down to the type of health system the UK operates. The NHS and other tax-based healthcare systems do not tend to have the financing costs typically incurred in health insurance schemes, such as revenues collection , risk-management, and profits in the case of mandatory private health insurance schemes.
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Visualizing The Social Risk Of The Worlds Top Investment Hubs
As social responsibility becomes an important aspect of doing business, its more crucial than ever for decision-makers to understand the risks associated with various global markets.
This graphic, using data from a report by Verisk Maplecroft, looks at the worlds top cities for foreign direct investment and assesses their relative levels of social risk.
In the article below, well take a look at the research methodology to explain how risk was assessed in the report and touch on some key markets that placed high on the ranking.
Figure : Uk Health Spending Per Person Was Around The Median For Oecd Member States
Healthcare spending per person in OECD countries in 2017
In the OECD, spending was lowest in Mexico at £837 per person and highest in the United States at £7,736 per person. The United States spend per person is considerably more than any other OECD country and more than two and a half times what is spent per person in the UK. While there are many reasons as to why countries spend different amounts on healthcare, the OECD report that countries spending the most tend to be high-income economies. Research suggests that the high spending in the United States, compared with other countries, is partly attributable to higher prices and partly because of the consumption of a greater volume of goods and services .
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History Of Government Spending
Government spending in early-industrialised countries grew remarkably during the last century
The visualization shows the evolution of government expenditure as a share of national income, for a selection of countries over the last century. The source of the data is Mauro et al. .1
The long-run series in this dataset cover mainly, but not exclusively OECD countries. Non-OECD countries with available long-run data include Russia, India, Argentina, Brazil, Peru and Colombia.
The above-mentioned long-run series are complemented in this dataset by comparable recent estimates for most countries in the world. You can plot other countries in this visualization by selecting Add country but bear in mind that the series for most non-OECD countries are much shorter.
If we focus on early-industrialized countries, we can see that there are four broad periods in this chart. In the first period, until the First World War, spending was generally low. In the US, for example, total government expenditure accounted for less than 2% of national income until 1916. These low levels of public spending were just enough for governments to be concerned with basic functions, such as maintaining order and enforcing property rights.
In the third period, between 1945-1980, public spending grew particularly fast. As we show in more detail later, this was the result of growth in social spending and was largely made possible by historical increases in government revenues over the same period.