Healthcare Economy

Countries Spending the Most on Health Care

Historically, health care spending among developed nations has grown considerably each year. However, beginning in 2010, spending has flattened. Based on figures published last week by the Organization for Economic Co-operation and Development (OECD), slow growth in 2011 reflects the continued impact the global recession has had on government spending.

As of 2011, health care cost $8,508 per person in the U.S., more than $2,800 higher than the second-highest spender among developed countries. The next big spenders are countries like Norway and Swizterland, which spent more than $5,000 per person. The reasons health care costs in these countries are so high varies considerably. Based on a report published by the OECD on global health issues, 24/7 Wall St. reviewed the 10 countries that spent the most on health care per capita.

Click here to see the top spenders

However counterintuitive, it is clear that spending more on health care does not result in better health outcomes. Of the top 10 nations with the highest health expenditure per capita, only three are in the top 10 for life expectancy. Residents in top-spending countries like Denmark and the U.S. have life expectancy below the OECD average of 80 years. At the same time, Italy and Japan both spend less than the OECD average per capita and are tied for first with the highest average life expectancy of nearly 83 years.

“Many other factors affect life expectancy beyond health care spending” explained OECD Health Division Senior Analyst Gaetan Lafortune. He mentioned living and working conditions, and lifestyle choices such as smoking and alcohol consumption and physical inactivity. He also noted that an earlier study conducted by the OECD showed that just 40% of the increase in life expectancy between 1991 and 2003, was estimated to be as a result of increased health care spending.

Whether a health care system is more privatized, as it is in the U.S., or more socialized, as it is in Norway and the Netherlands, does not appear to have much of an impact on cost. The U.S. and Switzerland had among the lowest government expenditure as a percent of total health spending. Both are in the top five for total health care spending per capita. However, so are Norway, the Netherlands, and Luxembourg, three of the health care systems with the highest public support.

In Germany, Canada, and France, pharmaceutical costs are a factor for more expensive health care, amounting to more than $600 per person annually, compared to the OECD average of less than $500. In the U.S., drugs cost nearly $1,000 per person, by far the most in the OECD.

The average hospital stay was longer in most of these countries, which may be driving up prices. However, in many of these countries, the average hospital stay for severe conditions is much lower. This, explained Lafortune, may not be cutting costs: “too short a length of stay may also cause adverse effects on health outcomes for patients. If this leads to a greater readmission rate, the cost may fall only slightly or even rise.”

While the cost of health care in some of these countries may be a product of more generous programs and higher cost of services, people may simply need more care because of poor health habits. The U.S. and Canada — two top spenders — are also in the top five among developed nations for obesity. Luxembourg, Austria, Germany, and France, are all in the top five for alcohol consumption. Lafortune explained that both alcohol consumption and obesity have been shown to drive up health care expenses. He noted that in the U.S., obesity is estimated to increase healthcare costs by as much as 10%.

Based on figures for the 34 developed nations provided in OECD’s Health Data 2013 release, 24/7 Wall St. reviewed the 10 countries where health expenditure per capita was the highest. All data is for 2011, or for the most recent available year. Included in the OECD’s release were a variety of statistics on health spending and costs. Also from the OECD, reviewed smoking rates, alcohol consumption, and obesity, as well as life expectancy.

These are the countries spending the most on healthcare.

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