Elsevier

The Lancet

Volume 384, Issue 9937, 5–11 July 2014, Pages 83-92
The Lancet

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

https://doi.org/10.1016/S0140-6736(14)60571-7Get rights and content

Summary

The USA has exceptional levels of health-care expenditure, but growth has 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.

Introduction

With a health expenditure per person of US$7212 in 2011, the USA outspends all other countries by a wide margin. In this Series paper, we review trends in health expenditure since 2000 in the USA and the five countries of the Organisation for Economic Co-operation and Development (OECD) with the highest health expenditure as a proportion of gross domestic product (GDP): Canada, France, Germany, the Netherlands, and Switzerland (hereafter referred to as “other high-spending countries”). Additionally, we analyse a selection of national health policies that contributed in a substantial way to shaping those trends, particularly after the economic recession started in 2008. The health-care systems of the countries examined have diverse sets of insurance organisational structures and regulation of the health-care system, as well as hospital and doctor payment systems. Contributions to health financing schemes have been mostly voluntary so far in the USA, but are compulsory in all other high-spending countries. This diversity makes comparisons somewhat challenging, but it provides an opportunity to assess how different types of health-care systems have responded to the economic downturn.

The analyses reported in this Series paper rely on OECD's System of Health Accounts (SHA) data,1 which provide a systematic account of financial flows through health systems, showing where money comes from, who manages it, and how it is used. The 2013 release of OECD Health Data, in which the latest SHA expenditure data were for 2011, was used in the analyses. A new release, including expenditure data up to 2012, occurred at the same time as the publication of this paper. Preliminary analyses of the newly released data lend further support to the results of analyses we present. For the purpose of making comparisons over time and across countries, we adjusted data for inflation on the basis of general (economy-wide) price indexes,2 although some of the comparisons in this paper are based on price levels specific to each country's health sector, which will become more widely available in the future.3 Finally, even if much policy attention has been drawn to the large and persistent geographical variation in health-care expenditure,4, 5, 6 we focused our analysis at country level. The use of more granular data would have made international comparisons difficult,7 although we acknowledge that analyses at a lower geographical level might provide additional information about the possible causes of the trends observed. Data from OECD collections were complemented by national sources and publications.

Section snippets

Health expenditure levels

The USA has the highest total and public health expenditure per person, and share of GDP spent on health care, of the countries examined. However, it has the lowest public share of health expenditure, albeit increasing over time, providing coverage for less than a third of the US population (table). Out-of-pocket (OOP) health expenditure per person is higher than in other high-spending countries (except Switzerland). The OOP share of health expenditure has been decreasing, although a larger

Health expenditure trends

Growth in health expenditure per person declined sharply in the USA from 2000 to 2011, after adjusting for inflation, and the start of the decline predates the economic recession.27 Figure 2 shows yearly growth rates in health expenditure for the USA and for all comparator countries combined, whereas figure 3 shows mean growth rates in individual countries. In the USA, spending grew more than twice as fast as in comparator countries in the early 2000s, but growth rates declined rapidly and fell

Key policy changes in the study period

We analysed key policies and policy changes in the USA and other high-spending countries in three areas—coverage, prescription drugs, and hospital inpatient care—to provide information about the factors and forces that have driven the reported deceleration in health expenditure.28 Important policy changes have been made in these areas in recent years, with substantial effects on health expenditure in the countries of interest. Changes occurred also in other areas (eg, ambulatory care), not

Discussion

The USA ranks first in the OECD for health-care expenditure, but last for coverage.10 Since 2000, the country made major progress in coverage (with more to come as the ACA takes full effect). At the same time, health expenditure growth was kept in line with other high-spending OECD countries, partly an effect of government policies, partly of market forces. A retrenchment, rather than expansion, of coverage was on other high-spending countries' policy agendas, as they faced the grim

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