Across nearly all Asia-Pacific countries, per capita health spending has risen faster than GDP in recent years. On average, per capita health spending in real terms in low- and lower-middle‑income Asia-Pacific countries increased by 4.6% per year between 2015 and 2021, while in upper-middle-income countries it grew by 6% during the same period; spending in high-income countries in the region also grew, but more modestly at 3.5% per year. Despite this, huge differences in per capita healthcare spending remained in Asia-Pacific countries in 2021 (Figure 6.1, left panel), ranging from only 93 international dollars (USD PPPs) in Papua New Guinea to 6 488 international dollars (USD PPPs) in Australia. For comparison, average OECD current health spending per capita in 2021 was almost 14 times that of the low-income countries in Asia-Pacific (4 708 versus 339 USD PPPs).
How much countries spend on healthcare as a share of GDP over time may be driven by various factors, though the COVID‑19 pandemic is likely to have significantly impacted health spending patterns in the recent years. Consequently, the healthcare sector continued to expand faster than the overall economy in Asia-Pacific, resulting in an increasing share of the economy devoted to health. On average, between 2015 and 2021, the growth rate in per capita health spending in real terms was 4.6% per year; higher than the 2.4% observed for gross domestic product (GDP) (Figure 6.2, left panel). All countries above the diagonal line reported that health expenditure has grown faster than the economy. This means that the share of healthcare expenditure in all GDP expenditure has continued to increase. For both health spending and overall economic activity, growth in Mongolia was the strongest in the region – more than twice and more than three times the average rate, respectively. By contrast, Brunei Darussalam was the only country to report a decrease in both per capita health spending and GDP in real terms between 2015 and 2021, while Fiji saw an increase in per capita health spending despite showing a slight decrease in GDP.
Current health expenditure accounted for 4.5% of GDP in low- and lower-middle‑income countries in 2021, significantly higher than in 2015 (3.9%). Health expenditure accounted for 4.8% and 8.1% of GDP in upper-middle‑income and high-income Asia-Pacific countries respectively in 2021, an increase of 1 and 0.9 percentage points compared to 2015. In 2021, the share of GDP varied from a low of 2.2% in Brunei Darussalam up to 10.8% in Japan (Figure 6.2, right panel). Generally, the richer a country is, the greater the share of their income devoted to healthcare. The percentage of GDP spent on health across OECD countries is – on average – more than twice that of the Asia-Pacific low- and middle‑income countries (9.7% versus 4.5%) and 1 percentage point higher than that in the high-income countries of the region. Between 2015 and 2021, the share of health in relation to GDP declined by 0.3 percentage points in India, whereas it increased in Mongolia, Korea, Fiji and Philippines by more than two percentage points.
Although health systems remain a highly labour-intensive sector, capital has become an increasingly important factor of production of health services over recent decades, as reflected, for example, by the growing importance of diagnostic and therapeutic equipment or the expansion of information and communications technology (ICT) in healthcare. However, capital investments in health tend to be more susceptible to economic cycles than current spending on healthcare. As a proportion of GDP, Philippines, China and Nepal were the highest spenders on capital investment in 2021 with more than 0.4% of their GDP going on construction, equipment and technology in the health sector (Figure 6.2, right panel), whereas less than 0.1% of GDP was spent in capital investment in health in Cambodia in 2021.
