Relative to its wealth, the U.S. spends a disproportionate amount on health
As would be expected, wealthy countries like the U.S. tend to spend more per person on health care and related expenses than lower income countries. Even as a high income country, the U.S. spends more per person on health than comparable OECD countries. Health spending per person in the U.S. was $8,745 in 2012 - 42% higher than Norway, the next highest per capita spender.
Comparing health spending in the U.S. to other countries is complicated, as each country has unique political, economic, and social attributes that contribute to its spending. Because health spending is closely associated with a country’s wealth, the remaining charts compare the U.S. to similar OECD countries – those that have above median national incomes (as measured by GDP) and also have above median income per person. The average amount spent on health per person in comparable OECD countries ($4,460) is roughly half that of the U.S. ($8,745). The average per capita health expense in the OECD overall (including smaller and lower-income countries) is significantly lower at $3,493 per person, or 40% of that spent in the U.S.
Over the past four decades, the difference between health spending as a share of the economy in the U.S. and comparable OECD countries has widened. In 1970 the U.S. spent about 7% of its GDP on health, similar to spending by several comparable countries (the average of comparably wealthy countries was about 5% of GDP in 1970). The U.S. was relatively on pace with other countries until the 1980s, when its health spending grew at a significantly faster rate relative to its GDP. In 2012 the U.S. spent 17% of its GDP on health, whereas the next highest country (the Netherlands) devoted 12% of its GDP to health.
While the U.S. has long had higher than average spending, it has not always been such an outlier. The 1980s saw accelerated growth in health expenditures per capita in the U.S. The 10.0% average annual growth rate in the U.S. during the 1980s was the highest among comparable OECD countries. The eleven comparably wealthy countries saw an average of 7.1% annual growth during this period. Since 1990, health spending has grown similarly in the U.S. and comparable countries.
Health spending growth in both the U.S and comparable OECD countries has slowed in recent years. In the 2008 – 2012 period, the U.S. saw a 2.9% average annual growth rate compared to 5.1% the previous four year period. Comparable countries also saw a drop to a 4.0% average annual growth rate during the 2008 – 2012 period, down from 5.8% on average in the 2004 – 2008 period. This could be due to the effects of the economy or to slower growth in medical technology.
While the U.S. has much higher total spending as a share of its economy, its public expenditures alone are in line with other countries. In 2012 the US spent about 8% of its GDP on health out of public funds – essentially equivalent to the average of the other eleven comparable OECD countries. However, private spending in the U.S. is much higher than any comparable country – 9% of GDP in the U.S., compared to 3% on average for other nations.
The U.S. has increased both public and private sector spending at a faster rate than similar countries
Over the last three decades, the U.S. has seen increased spending by both the public and private sectors. Comparable OECD countries increased private sector spending from 2% to 3% of GDP from 1970 to 2012, while the U.S. increased private sector spending from 4% to 9% during the same period. In 2012, the U.S. spent 8% of GDP on health through public funds, a rate similar to comparable countries.