OECD health spending stagnates as cuts hit

28 Jun 12

Overall health spending in the world’s leading economies stagnated in 2010 and early indications suggest little or no growth in 2011, the Organisation for Economic Co-operation and Development said today.

By Nick Mann | 28 June 2012

Health spending in the 34 OECD countries had previously increased by an average of 4.7% a year in real terms between 2000 and 2009, according to OECD health data 2012. This was mainly due to public spending, which accounts for around 70% of all health expenditure in OECD countries.

In 2008 and 2009, public spending on health increased by more than 5% but in 2010 it fell by 0.5%. According to the OECD this was a sign of spending cuts that had been postponed at the start of the economic crisis starting to be implemented, particularly in European countries worst hit by the recession.

Irish health spending fell by 7.6% in 2010, compared to average yearly growth of 8.4% between 2000 and 2009. The bulk of these reductions were made through cuts in wages and the fees paid to professionals and pharmaceutical companies, as well as reductions in health workers.

In Greece, total health spending fell by an estimated 6.5% in 2010 after a yearly growth rate of more than 6% on average since 2009. In Iceland a 9.3% reduction in public spending on health contributed to a 7.5% fall in health expenditure.

Outside Europe, health spending growth slowed to around 3% in the US, Canada and New Zealand, but remained at more than 8% in South Korea.

The zero overall growth in health spending meant that the percentage of gross domestic product spent on health fell slightly in 2010 – down from 9.6% in 2009 to 9.5%.

By far the highest percentage of GDP spent on health was recorded by the US (17.5%), followed by the Netherlands (12%), France (11.6%) and Germany (11.6%). The lowest share of GDP spent on health was recorded by Mexico (6.2%), followed by Turkey (6.1%).

Figures published by the OECD for seven countries indicate little improvement in health spending in 2011. It fell as a percentage of GDP in Canada, Finland, Iceland, Italy and Norway and increased in South Korea and Switzerland.