Overview of International Comparisons of Health Care Expenditures

Article excerpt

Overview of international comparisons of health care expenditures

Health care expenditure and utilization trends in the 24 Organization for Economic Cooperation and Development countries are provided and analyzed in terms of trends in price, population, and volume-intensity. The United States spends more on health than other countries, both in absolute dollar terms and relative to gross domestic product. Moreover, the gap appears to have grown in recent years. Although international comparisons are difficult for a number of reasons outlined in the article, they can be useful in focusing efforts to understand what the United States is getting for its one-half trillion dollar expenditure on health services.


This article is an overview of health care expenditure and utilization trends in the 24 Member countries of the Organization for Economic Cooperation and Development (OECD), a Paris-based international organization whose members are the Western industrialized countries. First, the basic underlying data and methodological issues in performing international comparisons are discussed. Second, trends in expenditures are analyzed. Third, increases in expenditures are analyzed in terms of price, population, and volume-intensity trends. Fourth, some concluding methodological and policy prescriptions about international comparisons are made.

Issues in international comparisons

International comparisons are difficult for a variety of reasons, including the following: * Data are generally not comparable. * Systems' performance cannot be easily evaluated

because of our inability to measure health

outcomes. * It is difficult to measure and control for social,

medical, cultural, demographic, and economic

differences across countries. * Transferability of policies across countries is


International comparisons are only as good as the basic underlying data upon which they are based. Countries produce data for administrative reporting purposes. Their data systems are based on the specific structural features of their health care financing and delivery systems. Thus, for example, if salaried hospital-based physicians are treated as part of hospital sector budgets, as is the case in the Federal Republic of Germany (hereafter called Germany), the Scandinavian countries, and the United Kingdom, then reported hospital expenditures will include these inhospital physician services. On the other hand, in countries, such as the United States and Canada, where most inhospital physician services are paid for on a fee-for-service basis, such expenditures will be reported separately as physician expenditures. Compounding this problem is the lack of internationally accepted definitions of components of health care expenditures, such as hospitals, nursing homes, and home health care.

Health care information is not presently reported in a standardized format. The data used in this article and reported in the data compendium section in this issue represent an attempt by the OECD to develop international health accounts in a manner similar to the development of national income and product accounts some 40 years ago. Although far from perfect, they represent the best attempt to date to develop comparable spending and utilization information. The spending aggregates are based on public and private health consumption and investment information reported as part of the national income and product accounts of the OECD. However, users of these data must bear in mind that individual countries are continually revising their underlying figures, often to as far back as 1960. Thus, although the orders of magnitude rarely change, analysts should not interpret these data too exactly. A brief methodological discussion is provided in the data compendium section of this issue.

A second problem in making international comparisons stems from our inability to measure the performance of health systems. …