In this collection of charts, we delve into a comparison of health expenditures in the United States with those in other OECD countries that share similar economic profiles – large and wealthy, based on median GDP and median GDP per capita. Our analysis is grounded in data from the OECD Health Statistics database.
The United States’ Health Spending: A Giant Compared to Other High-Income Countries
It’s a general trend that wealthier nations, including the U.S., tend to allocate more resources per person to health care compared to countries with lower incomes. However, even when we narrow our focus to high-income countries, the U.S. stands out, spending significantly more per capita on health.
Comparing health spending across different nations is inherently complex. Each country operates within its own unique political, economic, and social framework, all of which influence healthcare expenditure. Recognizing that a country’s wealth is a major determinant of health spending, our subsequent charts will benchmark the U.S. against comparable OECD countries. These are defined as nations with above-median national incomes and above-median income per person (measured by GDP and median GDP per capita) in at least one of the last ten years. This allows for a more meaningful comparison, focusing on countries with similar economic “size” to the US.
The UK and Other Similar Economies Spend Considerably Less on Health Per Person Than the U.S.
In 2022, health expenditures per person in the U.S. reached a staggering $12,555. This figure surpasses every other high-income nation by over $4,000. In stark contrast, the average health spending per person in comparable countries stands at approximately $6,651 – roughly half of the U.S. expenditure. When considering the UK specifically, their spending falls within this average of comparable nations, highlighting the substantial “size” difference in health spending compared to the US.
Per Capita Health Spending Rose in Most Peer Nations, Including the UK, in 2022
Between 2021 and 2022, almost all peer nations witnessed an increase in health spending per capita. The Netherlands was a notable exception, experiencing a slight decrease of 0.1%. The U.S. saw a 2.9% increase in per capita health spending, which, while smaller than in many comparable nations, was still higher than increases in Australia (2.4%), Canada (0.7%), and the United Kingdom (0.5%). Belgium recorded the largest increase among countries with available data for this period, at 9.6%.
The 2.9% increase in U.S. per capita health spending represents a slight uptick from the 2.4% increase between 2020 and 2021. However, it remains considerably lower than the significant 9.8% surge observed from 2019 to 2020, a period heavily impacted by the initial phase of the COVID-19 pandemic.
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Health Expenditure as GDP Percentage: The U.S. “Size” Remains Significantly Larger
Over the past half-century, the gap between health spending as a proportion of the economy in the U.S. and comparable OECD countries has widened dramatically. Back in 1970, the U.S. allocated approximately 6.2% of its GDP to health, a figure comparable to several other wealthy nations (the average for comparably wealthy countries was around 4.9% of GDP in 1970). The U.S. remained relatively aligned with other countries until the 1980s. It was during this decade that health spending in the U.S. began to accelerate at a significantly faster pace relative to its GDP. This trend has continued, with health spending as a share of the economy growing more rapidly in the U.S. than in its peer nations, including the UK.
The COVID-19 pandemic caused a dual effect: an increase in health spending and an economic downturn. This resulted in a spike in health spending as a share of GDP in the U.S. and every comparable country between 2019 and 2020. As economies have begun to recover, health spending as a share of GDP has decreased in the U.S. and most other peer nations, including the UK. In 2020, the U.S. dedicated 18.8% of its GDP to health-related expenditures, a significant jump from 16.7% in 2019. While this share has since declined to 17.4% in 2021 and further to 16.6% in 2022, it still remains substantially higher than in peer countries, highlighting the continued large “size” of US health spending relative to its economy compared to nations like the UK.
Health Spending Growth: The U.S. Pace Before COVID-19 Compared to the UK and Others
While the U.S. has consistently exhibited higher than average health spending, recent years have shown faster spending growth in other nations. Historically, the 1980s marked a period of accelerated growth in health expenditures per capita in the U.S. The average annual growth rate of 10.0% in the U.S. during the 1980s was significantly higher than that of comparable countries, which averaged 7.3% annual growth during the same period.
Looking at 5-year growth rates, during 2005-2010, the U.S. experienced an average annual growth rate in health spending of 4.1%, a decrease from 7.2% in the preceding five-year period. Comparable countries, including the UK, also saw a slowdown in health spending growth, averaging 4.5% annual growth during 2005-2010, down from 5.3% during 2000-2005. In the five years leading up to the COVID-19 pandemic (2015-2020), the U.S.’s growth in health spending per capita outpaced the average for comparable countries (5.0% versus 3.6%). However, the annual growth rate for the average of comparable countries increased significantly between 2020 and 2022 to 7.0%, contrasting with a smaller 2.7% increase for the U.S. during the same period. This indicates a recent shift in growth trends, although the overall “size” of US spending remains significantly larger than the UK and other comparable nations.
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The Peterson Center on Healthcare and KFF are partnering to monitor how well the U.S. healthcare system is performing in terms of quality and cost.
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