In the realm of global economics and healthcare, understanding how nations allocate resources to health is crucial. This analysis reviews and compares U.S. health expenditure with other OECD countries of similar economic stature, utilizing data from the OECD Health Statistics database to provide a clear comparison.
U.S. Health Spending Outpaces Peer Nations Relative to Economy Size
It’s a recognized trend that wealthier nations tend to invest more in healthcare per capita compared to lower-income countries. However, the United States stands out even among high-income countries, allocating a significantly larger portion of its economy to health.
Comparing international health spending is inherently complex, influenced by each country’s unique political, economic, and social frameworks. Given the strong correlation between national wealth and health spending, our review focuses on OECD countries with above-median national incomes and above-median income per person in at least one of the past ten years, ensuring a comparison with truly comparable nations.
Per Capita Health Expenditure in the U.S. Dwarfs Other Wealthy Nations
In 2022, the U.S. spent $12,555 per person on health expenditures, a figure exceeding every other high-income nation by over $4,000. The average health spending per capita in comparable countries stands at approximately $6,651, revealing that the U.S. spends roughly double per person compared to its peers. This stark difference highlights a significant divergence in healthcare spending priorities and/or system efficiencies.
Health Spending Per Person Rose Across Most Peer Countries in 2022
The year 2022 witnessed an increase in per capita health spending across almost all comparable nations, with the notable exception of the Netherlands, which saw a marginal decrease of 0.1%. The U.S. experienced a 2.9% increase in per capita health spending, a more moderate rise compared to many peer nations, yet still exceeding the growth rates of Australia (2.4%), Canada (0.7%), and the United Kingdom (0.5%). Belgium recorded the most substantial increase in per capita health spending among countries with available data between 2021 and 2022, at 9.6%.
This 2.9% growth rate in U.S. per capita health spending is slightly higher than the 2.4% increase observed between 2020 and 2021, but remains considerably lower than the 9.8% surge from 2019 to 2020, a period heavily impacted by the COVID-19 pandemic.
Related Analysis:
U.S. Life Expectancy vs. Comparable Countries: A Detailed Comparison
U.S. Healthcare Spending Trends Over Time: An In-depth Review
U.S. Health Spending as GDP Share Decreased in 2022 Amidst Economic Growth
Over the past half-century, the disparity in health spending as a proportion of GDP between the U.S. and comparable OECD countries has widened significantly. In 1970, the U.S. allocated approximately 6.2% of its GDP to health, a level similar to several comparable nations (the average for comparably wealthy countries was around 4.9% of GDP in 1970). The U.S. maintained a relatively similar pace with other countries until the 1980s. However, from the 1980s onwards, U.S. health spending grew at a markedly faster rate relative to its GDP. Since then, health expenditure as a share of the economy has increased more rapidly in the U.S. than in peer nations.
The COVID-19 pandemic caused a dual effect: increased health spending and economic downturn, leading to a surge in health spending as a percentage of GDP in the U.S. and all comparable countries between 2019 and 2020. As the economy recovered, health spending as a share of GDP has since decreased in the U.S. and most peer nations. In 2020, the U.S. spent 18.8% of its GDP on health-related expenditures, a rise from 16.7% in 2019. This percentage declined to 17.4% in 2021 and further to 16.6% in 2022, yet remains substantially higher than in comparable countries.
Pre-Pandemic Era Saw Slightly Faster Health Spending Growth in the U.S.
While consistently exceeding average health spending, recent trends indicate accelerated spending growth in other nations. Historically, the 1980s marked a period of rapid 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 significantly outpaced comparable countries, which averaged 7.3% annual growth during the same period.
Analyzing 5-year growth rates reveals that from 2005-2010, the U.S. experienced an average annual health spending growth rate of 4.1%, a slowdown from the 7.2% rate in the preceding five-year period. Comparable countries also saw a deceleration 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 per capita health spending growth surpassed the average of comparable countries (5.0% versus 3.6%). However, the annual growth rate for comparable countries increased between 2020 and 2022 to 7.0%, while the U.S. saw a smaller increase of 2.7% during the same period.
This review of comparative health spending underscores the United States’ unique position as a high-spending outlier among wealthy nations. Further analysis is needed to fully understand the factors driving this disparity and its implications for healthcare access, quality, and outcomes.
About the Health System Tracker
A collaboration between the Peterson Center on Healthcare and KFF, monitoring the U.S. healthcare system’s performance in quality and cost.
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