Health Care Spending in the United States and OECD Countries 

Health spending is rising faster than incomes in most developed countries, which raises questions about how these countries will pay for future health care needs.  The issue may be particularly acute in the United States, which not only spends much more per capita on health care than any other country, but which also has had one of the fastest growth rates in health spending among developed countries.  Despite this higher level of spending, the United States does not achieve better outcomes on many important health measures.  This paper uses information from the Organisation for Economic Co-operation and Development (OECD) ¹ to compare the level and growth rate of health care spending in the United States with other OECD countries.  In an increasingly competitive international economy, policymakers in the United States will need to be aware of how the health spending and spending growth in the United States compares to that of other nations.

It is reasonably well known that for some time the United States has spent more per capita on health care than other countries.  What may be less well known is that the United States has had one of the highest growth rates in per capita health care spending since 1980 among higher income countries.  Health care spending around the world generally is rising at a faster rate than overall economic growth, so almost all countries have seen health care spending increase as a percentage of their gross domestic product (GDP) over time.  In the United States, which has had both a high level of health spending per capita and a relatively high rate of real growth in that spending, the share of GDP devoted to health grew from 8.8% of GDP in 1980 to 15.2% of GDP in 2003 (Exhibit 5).  This almost 7 percentage-point increase in the health share of GDP is larger than increases seen in other high-income countries. 

This paper analyzes data on health spending and national income from the Organisation for Economic Co-operation and Development (OECD) countries with above-average per capita national income.  We exclude countries with relatively low per capita income because they have fewer resources to devote to health care and other necessities and do not provide a reasonable comparison for spending in higher income countries.²  We have provided footnotes where the OECD data show a break in series, indicating that the OECD data may not be comparable over the entire period that is being analyzed; Germany is excluded from the time series exhibits because its data are not comparable over the time periods due to reunification.³ The level of total health expenditure per capita is shown in U.S. dollars, adjusted for purchasing power parity (PPP).⁴  Data on growth rates and health care as a percentage of GDP are based upon the national currency of each country, with growth rates adjusted to remove the impact of general inflation. ⁵

Exhibit 1: Total Health Expenditures Per Capita, U.S. and Selected Countries, 2003

Exhibit 1 shows per capita health expenditures for 2003 in U.S. dollars purchasing power parity.  Health spending per capita in the United States is much higher than in other countries – at least 24% higher than in the next highest spending countries, and over 90% higher than in many other countries that we would consider global competitors.  Exhibit 2 shows that per capita health expenditures in the United States also were considerably higher than in the other analyzed countries in 1990.  Looking back further, however, while health spending per capita in the United States was higher than most other countries in 1970 and 1980, this was not as uniformly true as in the later period: Switzerland and Denmark ⁶ had spending levels comparable to the U.S. in the earlier period.⁷

^{Exhibit 2: Total Health Expenditures Per Capita, U.S. and Selected Countries,1970, 1980, 1990, 2003}

1970

1980

1990

2003

Australia

$252*

$691

$1,306

$2,886

Austria

193

770

1,328

2,958

Belgium

148

636

1,341

3,044^

Canada

299

783

1,737

2,998

Denmark

384*

927

1,522

2,743^

Finland

191

590

1,419

2,104

France

205

697

1,532

3,048

Iceland

163

703

1,593

3,159

Ireland

117

519

794

2,455

Italy

NA

NA

1,387

2,314

Japan

149

580

1,116

2,249^e

Luxembourg

163

640

1,533

4,611^

Netherlands

NA

755

1,435

2,909^e

Norway

141

665

1,393

3,769

Sweden

312

944

1,589

2,745

Switzerland

351

1,031

2,029

3,847

United Kingdom

163

480

987

2,317^

United States

352

1,072

2,752

5,711

*Value shown is for 1971. 

^Break in series; see “Comparability over time” at http://www.irdes.fr/ecosante/OCDE/411.html. ^eOECD estimate.

NA:  Not available.

Notes:  Amounts in U.S. $ PPP.  Germany is not included on this table because its data are not comparable over the time period due to reunification. 

Source:  Organisation for Economic Co-operation and Development. OECD Health Data 2006, from the OECD Internet subscription database updated October 10, 2006.  Copyright OECD 2006, http://www.oecd.org/health/healthdata.

This fact sheet summarizes the key changes West Virginia has approved for its Medicaid program as a result of the new flexibility available through the Deficit Reduction Act of 2005. West Virginia will change the benefit package for children and parents, parents will sign a member agreement for themselves and on behalf of their children to access certain benefits, and providers and managed care plans will monitor and report to the state their patients’ status with regard to meeting the member agreement responsibilities. Parents and children will continue to be covered for mandatory services, and the state must continue to provide Early and Periodic Screening, Diagnostic and Treatment services to children.

Fact Sheet (.pdf)

This fact sheet summarizes the key changes Kentucky has approved for its Medicaid program as a result of the new flexibility available through the Deficit Reduction Act of 2005. Kentucky uses new options related to benefits, cost sharing and long-term care.

Fact Sheet (.pdf)

The Vermont Choices for Care Long-Term Care Plan: Key Program Changes and Questions

This fact sheet summarizes Vermont’s Section 1115 waiver to make fundamental changes to its Medicaid program that provides long-term services and supports to eligible, low-income state residents. The waiver was designed to increase access to home and community-based services (HCBS), reduce use of institutional services and control overall costs for long-term services spending. The state hopes to achieve these goals by limiting access to nursing facility care and increasing the availability of HCBS. The program is subject to available funding under a global cap.

Fact Sheet (.pdf)

This report illustrates through case examples the experiences and challenges of low- and modest-income people who rely on Medicaid to pay for nursing home expenses. These case examples were developed through in-person interviews with nursing home residents and their families in three states: Georgia, Kansas and Virginia. The first section of the report summarizes the themes and issues shared across the interviews Kaiser conducted, while the second section presents the individual stories of a subset of those Kaiser interviewed.

Report (.pdf)

National Council of Jewish Women features article on “Diagnosing Women’s Health Care”

Kaiser Vice President and Director of Women’s Health Policy, Alina Salganicoff, authored an article titled “Diagnosing Women’s Health Care” featured in the National Council of Jewish Women’s magazine, NCJW Journal, volume 29. The article highlights the special challenges that many women face in affording and accessing comprehensive health care in the U.S. It discusses the state of women’s health coverage, emerging issues for women in Medicaid and Medicare and the potential effects of “consumer-directed” health plans on women.

Article (.pdf)

Toplines: Seniors’ Early Experiences With Their New Medicare Drug Plans – June 2006

These toplines contain the detailed results from the June 2006 tracking poll on seniors’ early enrollment experiences with the Medicare drug benefit.

Toplines (.pdf)

These toplines include selected findings from the June 2006 Kaiser Health Poll Report Survey, a bimonthly survey designed to provide key tracking information on public opinion about health care topics.

Toplines (.pdf)

Kaiser Health Poll Report Survey: Seniors’ Early Experiences With Their New Medicare Drug Plans – June 2006

More than eight in 10 seniors who are enrolled in a Medicare drug plan are satisfied with their plan, although almost two in 10 say they encountered a major problem in using it, according to the latest Kaiser Family Foundation tracking survey of seniors’ experiences under the new Medicare drug benefit.

The survey of 1,585 seniors, including 623 who are enrolled in a new Medicare Part D drug plan, reveals that, for most seniors, initial experiences under the drug benefit have been positive. About three in four seniors who are enrolled in a drug plan would choose the same plan again.

The survey also finds that about a third (34%) of seniors who have used their plan had experiences that they perceived as a problem — with 18% describing it as a “major problem” and 16% describing it as a “minor problem.” The experiences cited as problems include having to pay unexpected costs, leaving the pharmacy without being able to fill a prescription, not receiving their enrollment card and having to switch drugs because one wasn’t covered. Some seniors also cited having to switch from a brand-name to a generic drug as a problem, though others who reported such an experience did not consider it to be a problem.

Seniors’ Early Experiences With Their Medicare Drug Plans — the 13th in a series that comprises three large surveys and ten smaller tracking polls — was conducted and analyzed by researchers at the Kaiser Family Foundation. Fieldwork by PSRAI occurred between June 8 and June 18, 2006, among a nationally representative random sample of 1,585 adults ages 65 and older. Interviews were conducted in English and Spanish.

News Release

Chartpack

Toplines

Chartpack: Seniors’ Early Experiences With Their New Medicare Drug Plans – June 2006

These charts highlight key data from the June 2006 tracking poll on seniors’ early enrollment experiences with the Medicare drug benefit.

Chartpack (.pdf)