In this analysis, we delve into how health expenditures in the United States stack up against those in other OECD countries with comparable economic profiles, focusing on nations with similar levels of wealth and GDP per capita. Our review is based on data from the OECD Health Statistics database.
U.S. Health Care Costs Outpace Similar High-Income Countries Relative to Economy Size
It’s a general trend that wealthier nations, the U.S. included, allocate more resources to health care per person compared to countries with lower incomes. However, even within the bracket of high-income countries, the U.S. stands out for its significantly higher health spending per capita.
Comparing health spending across different countries is inherently complex due to the unique political, economic, and social factors influencing each nation’s approach. Given the strong correlation between a country’s wealth and its health expenditures, our comparison focuses on OECD countries that, like the U.S., have demonstrated above-median national incomes and above-median income per person (measured by GDP and median GDP per capita) in at least one of the past ten years.
Peer Nations Average Roughly Half the U.S. Spending Per Person on Health
In 2022, health expenditures per person in the U.S. reached $12,555, exceeding every other high-income nation by over $4,000. In contrast, the average health spending per person among comparable countries is approximately $6,651, about half of the U.S. figure.
Health Spending Per Capita Rose Across Most Peer Countries in 2022
The year 2022 saw an increase in per capita health spending in almost all peer nations, with the exception of the Netherlands, which experienced a slight decrease of 0.1%. The U.S. witnessed a 2.9% increase in per capita health spending, a more modest rise compared to many comparable nations, yet still greater than Australia (2.4%), Canada (0.7%), and the United Kingdom (0.5%). Belgium recorded the most significant surge in per capita health spending among countries with available data between 2021 and 2022, at 9.6%.
This 2.9% growth in U.S. per capita health spending is slightly up from the 2.4% increase between 2020 and 2021, but considerably less than the 9.8% jump from 2019 to 2020.
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U.S. Healthcare Spending Trends Over Time
U.S. Health Spending Share of GDP Decreased in 2022 Amidst Economic Growth
Over the past half-century, the gap between health spending as a proportion of GDP in the U.S. and comparable OECD countries has expanded. In 1970, the U.S. allocated approximately 6.2% of its GDP to health, aligning with spending levels in several comparable nations (the average for comparably wealthy countries was about 4.9% of GDP in 1970). Until the 1980s, the U.S. was broadly in step with other countries, after which health spending in the U.S. increased at a notably faster pace relative to its GDP. Since then, health spending as a share of the economy has grown more rapidly in the U.S. than in peer countries.
The COVID-19 pandemic triggered a surge in health spending and an economic downturn, leading to increased health spending as a share of GDP in the U.S. and all comparable countries between 2019 and 2020. With economic recovery since then, health spending as a share of GDP has declined in the U.S. and most other peer nations. In 2020, the U.S. spent 18.8% of its GDP on health-related expenditures, up from 16.7% in 2019. This share decreased to 17.4% in 2021 and further to 16.6% in 2022—yet it remains significantly higher than in comparable countries.
Pre-Pandemic, Health Spending Growth Was Slightly Faster in the U.S. Than in Peer Nations
While the U.S. has consistently exhibited higher average health spending, recent years have shown accelerated spending growth in other nations. Historically, the 1980s marked a period of rapid growth in health expenditures per capita in the U.S., with a 10.0% average annual growth rate, substantially higher than comparable countries’ average of 7.3%.
Analyzing 5-year growth rates, the period from 2005-2010 saw the U.S. with an average annual health spending growth rate of 4.1%, down from 7.2% in the preceding five years. Comparable countries also experienced a slowdown in health spending growth, averaging 4.5% annually during 2005-2010, compared to 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 outpaced the average for comparable countries (5.0% versus 3.6%). However, between 2020 and 2022, the annual growth rate for comparable countries increased to 7.0%, while the U.S. saw a 2.7% increase during the same period.
About the Health System Tracker
The Peterson Center on Healthcare and KFF are collaborating to track the performance of the U.S. healthcare system in terms of quality and cost.
