A variety of factors, from disease burden and system priorities to organisational aspects and costs, determine the allocation of resources across the various types of healthcare services. For all OECD countries, curative and rehabilitative care services make up the bulk of health spending. These are primarily delivered through inpatient and outpatient services – accounting for over three‑fifths of all health spending in 2023 (Figure 7.14). Medical goods (mostly pharmaceuticals) made up a further 18%, followed by long-term care services, consuming one in seven dollars of the health budget on average. Preventive care, together with administration and overall governance of the health system, account for the remaining 7% of health spending.
In 2023, Greece, Poland and Costa Rica reported the highest share of total health spending allocated to inpatient services, at around 40% – much above the OECD average of 28%. At the other end of the scale, many of the Nordic countries, Canada and the Netherlands had a much lower proportion of spending on inpatient services – at around 20%. Outpatient care forms a broad category covering generalist and specialist outpatient services, dental care, as well as homecare and ancillary services. Taken together, in 2023, spending on outpatient care services accounted for around 45% of all health spending in Israel, Portugal and Estonia compared to an OECD average of 33%. Given the relative importance of inpatient care delivery, Greece allocated a comparably low proportion on outpatient services, at only around one‑fifth of all health spending.
The third largest health spending category is medical goods. Differences in prices for international goods such as pharmaceuticals tend to show less variation across countries than for locally produced services. As a result, spending on medical goods in countries with lower incomes often accounts for a more elevated share of health spending relative to services. For example, in 2023, expenditure on medical goods represented around 30% of all health spending in the Slovak Republic and Greece. By contrast, these shares were much lower in Norway, the Netherlands and the United Kingdom, accounting for only one‑tenth of health spending.
The share of health spending dedicated to long-term care has been increasing continuously over recent decades and now stands at 14% on average. However, this figure hides significant differences across OECD countries. In countries with formal arrangements such as Norway, Sweden and the Netherlands, nearly 30% of all health spending was on long-term care services in 2023. However, a more informal long-term care sector exists in many Southern, Central and Eastern European and Latin American countries, where spending on long-term care is much lower – typically around 5% or less.
In recent years, the various public health and economic shocks had an impact on health spending patterns in many countries, resulting in notable differences in the spending trajectory across services (Figure 7.15). In the pre‑pandemic period (2017‑2019), variation in annual per capita spending growth across OECD countries was relatively limited, ranging from around 1% for pharmaceuticals to between 3‑4% for outpatient care, long-term care, prevention and administration. The pandemic triggered an acceleration of spending growth across all healthcare functions. Between 2019 and 2021, annual spending growth for inpatient care and pharmaceuticals nearly doubled (to 4.3% and 2.7%, respectively), driven by expenses for additional staff and input costs as well as spending on protective equipment such as face masks. Spending on preventive care increased by over 50% per year, with countries dedicating significant resources to testing, tracing, surveillance, and public information campaigns related to the pandemic and the roll-out of the vaccination campaigns. At around 8% annually, spending on health system administration also recorded strong growth between 2019 and 2021. Some of this increase can be explained by the additional resources required to manage national COVID‑19 responses strategies. The period 2021‑2023 saw a widespread unwinding of additional COVID‑19 spending, which affected all health services. Moreover, many OECD countries struggled with high inflation and the energy and cost-of-living crises, and health budgets had to increasingly compete with other priorities again. As a result, annual spending growth turned negative for most services in this period in many countries, with long-term care being a notable exception.
