Countries Spending the Most on Health Care
Globally, health care spending has increased dramatically since 1980. However, while health care spending increased faster than the economic growth in the late 1990s and early 2000s, it slowed with the onset of the recession in 2009. Based on a recent report, the countries spending the most on health care today allocate between 8.9% and 16.4% of their total gross domestic product (GDP) to health care costs.
Based on “Health at a Glance 2015” from the Organization for Economic Co-operation and Development (OECD), 24/7 Wall St. reviewed annual per capita health care expenditures in countries around the world. The United States spends about $8,713 per person on health care annually, by far the most of any country in the world. By contrast, many countries, including Turkey and India, spend less than $1,000 on health care per person annually.
Health care expenditures cover a wide range of areas, from medical practitioner salaries and costly medical procedures, to pharmaceutical products and hospital administration. Each of these areas also call for varying amounts of resources. Pharmaceutical costs are a major component of overall spending. According to the report, OECD nations spent a combined $800 billion on pharmaceuticals alone in 2013, or about 20% of all health spending.
The number of doctors and nurses grew since 2000 in nearly all OECD countries, but the countries adding these medial positions the fastest were not necessarily the biggest spenders. Only one of the top 10 countries for health spending added these jobs significantly faster than the OECD average.
This is likely because the countries spending the most on health care have had large numbers of doctors and nurses for some time. The concentration of practising nurses exceeded the OECD average in all of the 10 countries spending the most on health except for Austria — one of the countries adding medical professionals the fastest. In Switzerland, there are over 17 nurses per 1,000 citizens, the most worldwide.
All of the 10 countries on the list spend at least 8.9% of their total GDP on health care. The difference, however, between the No. 1 spender, the United States, and the No. 10 spender, Canada, is quite large. Canada spent 10.2% of its GDP on health care in 2013, which amounted to $4,351 per person, while the United States spent 16.4% of its GDP that year, amounting to $8,713 per person.
According to Francesca Colombo, head of the health division at the OECD, “Higher health sector prices explain much of the difference between the U.S. and other high-spending countries.” She added that the health care system in the United States is also fragmented and overly complex, with a larger share of uninsured individuals than is common among developed countries. While every country on the list has near universal health care coverage, only 88.5% of Americans are insured. However, under the Affordable Care Act, the U.S. uninsured rate is on the decline.
People living in the countries with the highest health spending also tend to have better health outcomes. For example, of the 10 countries spending the most on health care, seven have a lower infant mortality rate than the OECD average. Similarly, all but two countries on the list have a higher life expectancy than the OECD average of 80.5 years.
However, the relationship between spending and outcomes, and what causes good health is far from straightforward. A number of behavioral and lifestyle factors have a major influence on health outcomes. Colombo explained that “factors outside the health sector,” including nutrition, alcohol consumption, and smoking “are important determinants of health outcomes.”
Though the United States spends far more on health care than any other nation, life expectancy of the average American is only 78.8 years, lower than the OECD average and the lowest among the top spending nations. Lifestyle choices in the country may be partially to blame. Slightly more than 35% of American adults are obese, a higher share than in any of the 43 countries the OECD reviewed.
To identify the countries spending the most on health care, 24/7 Wall St. reviewed 2013 health expenditures per capita in 43 nations from the OECD’s “Health at a Glance 2015” report. The report compared the health status and health systems in OECD countries and a number of non-OECD countries, including China, Russia, and Brazil. Yearly health care spending data from 1980, life expectancy, infant mortality, smoking rates, alcohol and fruit and vegetable consumption, as well as obesity rates all came from the report. Medical practitioners such as doctors and nurses, as well as the number of hospital beds and average duration of hospital visits, also came from the OECD. GDP figures came from the International Monetary Fund (IMF).
These are the countries spending the most on health.