Wealthy nations typically allocate a larger portion of their resources to healthcare compared to lower-income countries. However, even when focusing on high-income nations, the United States stands out with significantly higher per capita health expenditures. Understanding these disparities requires a nuanced approach, considering the unique economic and social landscapes of each country. This analysis delves into how U.S. healthcare spending compares to a select group of OECD countries with similar economic profiles, offering valuable insights into the factors driving these differences.
U.S. Healthcare Spending Dwarfs That of Peer Nations
In 2022, the United States’ health expenditure per person reached $12,555. This figure starkly contrasts with other high-income nations, exceeding the next highest spender by over $4,000. When compared to the average of similar large and wealthy OECD countries ($6,651), the U.S. spends approximately double per person on healthcare. This substantial gap underscores the unique position of the U.S. in global healthcare spending.
Recent Trends in Per Capita Health Spending
The year 2022 witnessed an increase in per capita health spending across most comparable nations. 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 lower than the increases in many peer countries, was still more significant than that of Australia (2.4%), Canada (0.7%), and the United Kingdom (0.5%). Belgium recorded the most substantial surge in per capita health spending among nations with available data, at 9.6%.
It’s worth noting that the 2.9% increase in U.S. per capita health spending represents a slight uptick from the 2.4% increase observed between 2020 and 2021. However, it remains considerably lower than the significant 9.8% jump from 2019 to 2020, a period heavily influenced by the onset of the COVID-19 pandemic.
Health Spending as a Proportion of Economic Size (GDP)
Over the past half-century, a significant divergence has emerged in health spending as a share of the economy between the U.S. and comparable OECD countries. In 1970, the U.S. allocated roughly 6.2% of its GDP to health, a figure comparable to several other wealthy nations (the average for similar countries was approximately 4.9% of GDP in 1970). Until the 1980s, the U.S. maintained a relatively similar trajectory to its peers. However, the 1980s marked a turning point, with U.S. health spending growing at a disproportionately faster rate relative to its GDP. This trend has persisted, resulting in a widening gap between the U.S. and other comparable nations in terms of health spending as a percentage of the economy.
The COVID-19 pandemic temporarily amplified this gap. The pandemic led to increased health expenditures coupled with economic contractions, resulting in a spike in health spending as a share of GDP in the U.S. and all comparable countries between 2019 and 2020. As economies began to recover, health spending as a share of GDP decreased in the U.S. and the majority of peer nations. In 2020, U.S. health-related expenditures reached 18.8% of GDP, up from 16.7% in 2019. While this percentage declined to 17.4% in 2021 and further to 16.6% in 2022, it remains substantially higher than that of economically similar countries.
Historical Trends in Health Spending Growth
While the U.S. has consistently exhibited higher average health spending, recent years have seen accelerated spending growth in other nations. The 1980s witnessed a surge in health expenditure growth per capita in the U.S., with an average annual growth rate of 10.0%, significantly exceeding the 7.3% average of comparable countries.
Analyzing 5-year growth rates reveals shifts in these trends. During 2005-2010, the U.S. experienced an average annual health spending growth rate of 4.1%, a slowdown from the 7.2% of the preceding five-year period. Comparable countries also saw a deceleration, from 5.3% average annual growth (2000-2005) to 4.5% (2005-2010). In the five years preceding the COVID-19 pandemic (2015-2020), the U.S.’s per capita health spending growth (5.0%) surpassed the average of comparable countries (3.6%). However, between 2020 and 2022, the average annual growth rate for comparable countries surged to 7.0%, while the U.S. saw a comparatively smaller increase of 2.7% during the same period.
Conclusion
The data clearly indicates that the United States’ healthcare spending significantly outpaces that of other large, wealthy nations when considering both per capita expenditure and health spending as a proportion of GDP. While recent trends suggest a potential convergence in growth rates, the absolute levels of spending in the U.S. remain markedly higher. Further research is needed to fully understand the multifaceted factors contributing to these persistent differences and to explore potential pathways towards more efficient and equitable healthcare spending.
