The Organisation for Economic Co-operation and Development (OECD) provides information about, and to, thirty member countries that are governed democratically and participate in the global market economy. It collects and publishes data about a wide range of economic and social issues including health and health care policy. The OECD member nations are generally considered the wealthier, more developed nations in the world. The OECD includes the Western European nations, Canada, the United States, Japan, Australia, New Zealand, Mexico, the Czech Republic, South Korea, Poland, Hungary, and the Slovak Republic.
Percentage of Gross Domestic Product Spent on Health Care
Although health has always been a concern for Americans, the growth in the health care industry since the mid- 1970s has made it a major factor in the American economy. For many years the United States has spent a larger proportion of its gross domestic product (GDP) on health care than have other nations with similar economic development. From 1990 to 2000 U.S. health expenditures grew 2.3 times faster than GDP, rising from 13% in 1997 to 14.6% in 2002, the highest rate in the OECD. (See Figure 7.1.) Other nations that spent large percentages of GDP on health care in 2002 included Switzerland (11.2%), Germany (10.9%), Iceland (9.9%) France (9.7%), Canada (9.6%), and Greece (9.5%). Of the member nations that reported health care expenditure data in 2002, Mexico (6.1%), Poland (6.1%), South Korea (5.9%), and the Slovak Republic (5.7%) spent the least in the OECD.
While the growth in health care spending (as expressed by an increase in health expenditures as a percentage of GDP) in the United States from 1997 to 2002 (1.6%) was not a universal trend, several other countries also experienced significant increases in the percentage of their GDP spent on health care during this period. These included Iceland (up 1.8%), South Korea (1.2%), New Zealand (from 1.1%), Sweden (1%), and Switzerland (1%). (See Figure 7.2.) These countries, however, were spending a relatively small percentage of their GDP on health care in 1990. Only the Slovak Republic saw a slight decline—a scant 0.1% drop in total health spending as a percentage of GDP between 1997 and 2002. The majority of other countries experienced small increases. (See Figure 7.2.)
Per Capita Spending on Health Care
In 2002 the United States also experienced the highest per capita spending for health care services, spending an average of $5,267 per citizen. (See Figure 7.3.) No other country came close to spending that amount per capita in 2002: Switzerland spent $3,445 per citizen; Norway, $3,083; Luxembourg, $3,065; Canada, $2,931; Germany, $2,817; Iceland, $2,807; and France, $2,736. In 2002 Turkey spent the least per capita of any OECD nation on health care ($446) followed by Mexico ($553), Poland ($654), the Slovak Republic ($698), and South Korea ($931).
Who Pays for Health Care?
Public expenditures for health care services, as a percentage of GDP, vary widely between the OECD member nations. Public spending on health accounted for nearly 75% of total health spending on average across OECD countries in 2002, virtually unchanged from its share in 1995. The remaining 25% of spending was paid by private sources, mainly private insurance and individuals. In the United States public funding accounted for 45% of total health spending. In contrast, in the Czech Republic 91.4% of total health spending was publicly funded, and in the Slovak Republic public funding accounted for 89.1% of the total health expenditure. Other nations with above-average contributions of public funding to health expenditures included Denmark (83.1%), Iceland (84%), Luxembourg (85.4%), Norway (85.3%), Sweden (85.3%), and the United Kingdom (83.4%). (See Table 7.1.)
Of the nineteen OECD nations that reported out-of-pocket, per capita payments in 2002, the United States and Switzerland far exceeded other countries. Swiss citizens spent the equivalent of $1,085 out-of-pocket and U.S. citizens spent an average of $737 out-of-pocket for health care, about 60% more than the per capita amount of Italy ($439) and nearly ten times the per capita amount spent by citizens of the Slovak Republic ($76). (See Table 7.2.)
Private health insurance fills the gap between public expenditures and out-of-pocket costs. Only sixteen OECD member nations reported private insurance expenditures for health care in 2002. However, among the countries declaring private insurance as a percentage of total expenditures for health, the United States far exceeded the others. At 36.2%, the U.S. private insurance expenditure was twice that of the Netherlands (17.1%) and far outstripped the other countries—France (13.2%), Canada (12.7%), Switzerland (9.6%), Austria (7.4%), and New Zealand (5.7%). (See Table 7.3.) Since the United States is the only developed country without a national health care program, U.S. private insurance expenditures cover the costs generally assumed by government programs that finance health care delivery in comparable OECD member nations.
Spending for Hospitalization and Pharmaceutical Drugs
Interestingly, though the United States spends more on health care than other OECD nations, it devoted a smaller percentage of total health expenditures (27.6%) to inpatient hospitalization than all the other countries (except Spain, which spent the same percentage on inpatient hospitalization) that reported inpatient expenditures in 2002. (See Table 7.4.) This finding is attributable to lower rates of hospitalization, shorter average lengths of stay, and a rise in outpatient hospital and other ambulatory care services in the United States.
In 2002 the United States spent 12.8% of its health care dollars on pharmaceutical drugs and durable medical supplies and equipment. (See Table 7.5.) This number was comparable to the percent of total expenditures that Denmark, Italy, Luxembourg, the Netherlands, and Switzerland spent on pharmaceuticals. Other countries reporting pharmaceutical expenditures spent considerably more—the Czech Republic 22.6%; France 20.8%; Hungary 27.6%; Italy 22.4%; Mexico 21.6%; the Slovak Republic 37.3%; and Spain 21.5%.
Hospital Utilization Statistics
Of the fifteen OECD countries reporting acute care hospital utilization data, the Czech Republic and Austria had the highest number of acute care beds in 2002 (6.5 and 6.1 beds per one thousand population, respectively). (See Table 7.6.) Hungary had the next-highest number of beds, at 5.9 per one thousand population in 2002. The United States was among the lowest, 2.9 in 2002, trailed only by Finland, Turkey, and Mexico with 2.3, 2.1, and 1 beds, respectively, per one thousand population.
Hospital lengths of stay have consistently declined since 1960, in part because increasing numbers of illnesses could be treated as effectively in outpatient settings and because many countries have reduced inpatient hospitalization rates and average length of stay (ALOS) to control health care costs. In 2002 South Korea had the longest acute-care ALOS of the OECD nations reporting (11.0 days), followed by and Switzerland and the Czech Republic with ALOS of 9.2 and 8.3 days, respectively. (See Table 7.7.) The shortest hospital stays in 2002 occurred in Mexico, Denmark, and Finland, where ALOS was 3.5, 3.7, and 4.3 days, respectively. The United States ALOS was 5.7 days in 2002, on par with Norway, also at 5.7.
Medical practice, particularly the types and frequency of procedures performed, also varies from one country to another. The OECD looked at rates of Caesarian section (also known as C-section; delivery of a baby through an incision in the abdomen as opposed to vaginal delivery) per one thousand births and found considerable variation in the rates for this surgical procedure. Among the fifteen countries reporting in 2002, the highest rates for Caesarian section were reported in the United Kingdom (427), South Korea (392.1), Italy (361.9), Mexico (336), the United States (261), and Luxembourg (258). (See Table 7.8.) Since Caesarian section is performed in the hospital and generally involves at least an overnight stay, the frequency with which it and other surgical procedures are performed contributes to hospitalization rates and expenditures.
Physicians' Numbers Are Increasing
Since 1960, the OECD member nations have all enjoyed growing physician populations. In 2002, of those countries reporting, Italy reported the highest ratio of practicing physicians, 4.4 per one thousand population, with most countries ranging between two and four physicians per one thousand population. (See Table 7.9.) In 2002 the fewest practicing physicians were found in Turkey (1.3 per one thousand population), followed by South Korea (1.5 physicians per one thousand population) Mexico (1.5), and Japan (2). Canada, New Zealand, and the United Kingdom all reported data showing 2.1 physicians per one thousand population. Though figures for 2002 were not reported from the United States, the number from 2001 was 2.4 physicians for one thousand people.
The ratio of physicians to population is a limited measure of health care quality, because many other factors, such as the availability of other health care providers as well as accessibility and affordability of health care services, also influence the quality of health care systems. Furthermore, during the last two decades research has shown that more medical care, in terms of numbers and concentration of health care providers, is not necessarily linked to better health status for the population. Researchers in the United States have found that an over-supply of providers may result in unnecessary treatment, procedures, and health care costs.