Health-care expenditure and health policy in the USA versus other high-spending OECD countries

 

The USA has exceptional levels of health-care expenditure, but growth slowed dramatically in recent years, amidst major efforts to close the coverage gap with other countries of the Organisation for Economic Co-operation and Development (OECD). We reviewed expenditure trends and key policies since 2000 in the USA and five other high-spending OECD countries. Higher health sector prices explain much of the difference between the USA and other high-spending countries, and price dynamics are largely responsible for the slowdown in expenditure growth. Other high-spending countries did not face the same coverage challenges, and could draw from a broader set of policies to keep expenditure under control, but expenditure growth was similar to the USA. Tightening Medicare and Medicaid price controls on plans and providers, and leveraging the scale of the public programmes to increase efficiency in financing and care delivery, might prevent a future economic recovery from offsetting the slowdown in health sector prices and expenditure growth.

> OECD press release: After Decline in U.S. Health Expenditure Growth, OECD Sees Risk of Spending Uptick in Recovery
> Lancet press release: Dramatic slowdown in growth of US health expenditure over last decade closes gap between USA and other high-spending countries
> Read the paper

Key messages

  • The United States rank first in the OECD for health care expenditure, but last for coverage.
  • Health price levels contribute the most to explaining higher spending in the United States, and recent price dynamics largely explain declines in health expenditure growth.
  • During the period examined in this paper (2000-11), the United States prevented a significant increase in the numbers of uninsured from the economic downturn and population growth; at the same time, health care expenditure growth rates fell in line with those of other high-spending OECD countries.
  • High and increasing rates of generic drug use, an important shift from inpatient to outpatient hospital care, along with some effective price control measures on plans and providers by Medicare and Medicaid, were among key factors behind the slowdown in health care expenditure growth in the United States.
  • Further scope exists for improvement, particularly in controlling the main driver of higher health care expenditure in the USA (i.e. health sector prices); the risk that a future sustained economic recovery, and the likely general price increases that would come with it, might offset the gains made in recent years is real, and should be anticipated.


Mean health expenditure growth per person (in real terms) across OECD countries, 2001-2011

OECD-Lancet-Mean-health-expenditure-growth-per-person

Source: OECD Health Statistics 2013

 

Contacts

Luca Lorenzoni, Health Economist and lead author of the report (luca.lorenzoni@oecd.org)
Franco Sassi, Senior Health Economist and co-author (franco.sassi@oecd.org)
Annalisa Belloni, Health Economist and co-author (annalisa.belloni@oecd.org)

 

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