Wealthy nations often allocate significant portions of their economies to healthcare, but the distribution and efficiency of this spending vary widely. This analysis delves into how the United States’ healthcare expenditure compares to that of other high-income OECD countries, with a particular focus on the United Kingdom as a key point of comparison, considering the relative size of their economies. We utilize data from the OECD Health Statistics database to provide a clear picture of these international differences.
U.S. Healthcare Spending Dwarfs That of Peer Nations Relative to Economic Size
It’s a well-established trend that wealthier countries invest more per capita in healthcare. However, even when compared to other high-income nations, the U.S. stands out for its exceptionally high level of health spending. Understanding these disparities requires careful consideration of each country’s unique socio-economic and political landscape. Given that health spending is intrinsically linked to a nation’s economic prosperity, our comparison focuses on OECD countries with similarly robust economies, specifically those exceeding median national income and median income per capita in recent years.
The UK and Other Wealthy Nations Spend Considerably Less Per Person on Health Than the US
In 2022, health expenditures per person in the United States reached a staggering $12,555. This figure not only surpasses all other high-income nations but is more than $4,000 greater than the next highest spender. In stark contrast, the average health spending per person in comparable wealthy countries, including the UK, is approximately $6,651 – roughly half of the U.S. expenditure. This substantial gap highlights a significant difference in how resources are allocated to healthcare between the U.S. and its peer nations, including the UK.
Post-Pandemic Rebound: Health Spending Increases Across Peer Nations, Including the UK
The period between 2021 and 2022 saw an increase in per capita health spending across almost all comparable nations, except for a slight decrease in the Netherlands. The U.S. experienced a 2.9% increase, which, while notable, was smaller than the increases seen in many peer countries but larger than in Australia (2.4%), Canada (0.7%), and the United Kingdom (0.5%). Belgium recorded the most significant surge in per capita health spending at 9.6%.
This recent 2.9% increase in U.S. per capita health spending is a marginal rise from the 2.4% increase between 2020 and 2021, but significantly lower than the 9.8% spike observed from 2019 to 2020, reflecting the fluctuating impacts of the pandemic on healthcare economies globally, including in the UK and the US.
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GDP Share of Health Spending: U.S. vs. OECD Peers, Including the UK
Over the past half-century, the divergence in health spending as a proportion of GDP between the U.S. and comparable OECD countries has become increasingly pronounced. 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 comparable countries was around 4.9%). Until the 1980s, the U.S. remained relatively aligned with these countries. However, from the 1980s onward, U.S. health spending began to escalate at a much faster pace relative to its GDP. This trend has continued, widening the gap between the U.S. and its peers, including the UK, in terms of health spending as a share of the economy.
The COVID-19 pandemic temporarily inflated health spending as a percentage of GDP in the U.S. and across comparable countries, including the UK, due to increased healthcare demands coupled with economic contractions in 2020. While economies have since begun to recover, leading to a decrease in health spending as a GDP percentage in the U.S. and most peer nations, the U.S. still spent 16.6% of its GDP on health in 2022. This is down from 18.8% in 2020 and 17.4% in 2021 but remains significantly higher than in peer countries like the UK.
Pre-Pandemic Health Spending Growth: U.S. vs. Peer Nations, UK Included
While consistently higher than average, U.S. health spending growth has been recently outpaced by other nations. The 1980s marked a period of rapid acceleration in U.S. per capita health expenditures, with an average annual growth rate of 10.0%, considerably higher than the 7.3% average in comparable countries.
Examining 5-year growth rates reveals that in the period 2005-2010, U.S. average annual health spending growth was 4.1%, down from 7.2% in the preceding five years. Comparable countries also experienced a slowdown, averaging 4.5% growth in 2005-2010, down from 5.3% in 2000-2005. In the five years leading up to the pandemic (2015-2020), the U.S. saw a 5.0% average annual growth, exceeding the 3.6% average of comparable countries. However, between 2020 and 2022, the annual growth rate for comparable countries surged to 7.0%, while the U.S. saw a comparatively smaller increase of 2.7%. This data underscores the consistently higher healthcare expenditure in the U.S. when compared to nations like the UK and other OECD countries, both in absolute terms and relative to the size of its economy.
About this site
The Peterson Center on Healthcare and KFF collaborate to assess the U.S. healthcare system’s performance in quality and cost.
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