Wealthy nations generally invest more in healthcare per person compared to lower-income countries. However, even when compared to other high-income nations, the United States stands out for its significantly higher health expenditures. This analysis delves into how U.S. health spending compares to similarly large and wealthy OECD countries, utilizing data from the OECD Health Statistics database. Understanding these comparisons is crucial in assessing the scale of the U.S. healthcare system in a global context.
U.S. Healthcare Spending Dwarfs That of Peer Nations Relative to Economy Size
While economic prosperity often correlates with increased healthcare spending, the U.S. allocates a disproportionately large share of its economy to health compared to other affluent nations. Comparing international health spending is complex due to varying political, economic, and social landscapes. To provide a relevant comparison, we focus on OECD countries with above-median national incomes and above-median income per capita, mirroring the U.S.’s economic stature. This approach ensures we are comparing the U.S. to nations of a comparable economic “size.”
Per Person, U.S. Health Spending Is Roughly Double That of Other Wealthy Countries
In 2022, the U.S. spent an astounding $12,555 per person on health expenditures. This figure surpasses every other high-income nation by over $4,000. In fact, comparable large and wealthy countries averaged approximately $6,651 per person on health in the same year. This stark difference highlights the sheer “size” of the financial commitment to healthcare in the U.S. compared to nations of similar economic capacity.
Most Peer Countries Saw Per Capita Health Spending Rise in 2022
Between 2021 and 2022, the majority of peer nations experienced an increase in per capita health spending. The Netherlands was a notable exception, with a slight decrease of 0.1%. The U.S. saw a 2.9% increase in per capita health spending, a moderate rise compared to many peers, but greater than Australia (2.4%), Canada (0.7%), and the United Kingdom (0.5%). Belgium recorded the most substantial increase among reporting countries, at 9.6%.
This 2.9% growth in U.S. per capita health spending slightly exceeded the 2.4% increase between 2020 and 2021. However, it remained significantly lower than the 9.8% surge observed from 2019 to 2020, a period heavily impacted by the COVID-19 pandemic.
U.S. Health Spending as GDP Share Decreased in 2022 Amid Economic Growth
Over the past half-century, the disparity in health spending as a percentage of GDP between the U.S. and comparable OECD countries has widened considerably. In 1970, the U.S. allocated around 6.2% of its GDP to health, a figure comparable to several peer nations (the average for wealthy countries was about 4.9%). Until the 1980s, the U.S. maintained a similar trajectory to other countries. However, from the 1980s onward, U.S. health spending grew at a significantly faster pace relative to its economic output. Consequently, health spending as a share of the economy has expanded more rapidly in the U.S. than in peer nations.
The COVID-19 pandemic in 2020 triggered a surge in health spending and an economic downturn, leading to increased health spending as a GDP percentage in the U.S. and all comparable countries. As economies recovered, this share has since declined in the U.S. and most peer nations. In 2020, U.S. health spending reached 18.8% of GDP, up from 16.7% in 2019. This share decreased to 17.4% in 2021 and further to 16.6% in 2022. Despite these recent declines, the proportion of the U.S. economy dedicated to healthcare remains significantly larger than in comparable countries, showcasing the “size” of healthcare within the U.S. economy.
Pre-Pandemic, U.S. Health Spending Growth Slightly Outpaced Peer Nations
While consistently exceeding average health spending, the U.S. has experienced varying growth rates compared to peer nations. The 1980s witnessed a surge in U.S. per capita health expenditure growth, with a 10.0% average annual increase, significantly higher than the 7.3% average in comparable countries.
Analyzing 5-year growth periods, from 2005-2010, the U.S. saw an average annual health spending growth of 4.1%, down from 7.2% in the preceding five years. Comparable countries also experienced a slowdown, from 5.3% to 4.5% average annual growth. In the five years leading up to the pandemic (2015-2020), U.S. per capita health spending growth (5.0%) exceeded the average of comparable countries (3.6%). However, between 2020 and 2022, the average annual growth rate for comparable countries increased to 7.0%, while the U.S. saw a smaller 2.7% increase.
In Conclusion
This comparative analysis reveals the substantial “size” of the U.S. healthcare system in terms of expenditure, both per person and as a share of the economy, when benchmarked against other large, wealthy nations. While recent trends indicate some convergence in growth rates and a decrease in GDP share, the U.S. continues to be a significant outlier in healthcare spending on the global stage. Understanding this “Size Compare Countries” dynamic is crucial for informed discussions about healthcare policy and economic priorities.
