Academic journal article Health Care Financing Review

U.S. Health Expenditure Performance: An International Comparison and Data Update

Academic journal article Health Care Financing Review

U.S. Health Expenditure Performance: An International Comparison and Data Update

Article excerpt

Introduction

In this article, we examine expenditure trends and the economic performance of the health systems of the 24 Organization for Economic Cooperation and Development (OECD) countries with special emphasis on 6: Canada, France, Germany (the former Federal Republic of Germany), Japan, the United Kingdom, and the United States. Because current data on availability and use of services and health outcomes were recently analyzed (Schieber, Poullier, and Greenwald, 1991), we focus on health expenditure performance, emphasizing U.S. performance relative to that of other countries. First, recent revisions to the OECD data are discussed. Second, the various expenditure measures to be analyzed are described. Third, levels and trends are analyzed in the ratios of health care expenditures to gross domestic product (GDP), per capita health spending and GDP in U.S. dollars, and the public share of total health spending for the 24 OECD countries for 1980-90. Next, the expenditure performances of Canada, France, Germany, Japan, the United Kingdom, and the United States are analyzed on the basis of a range of different measures of health sector performance. Fifth, some concluding observations are made on the implications of the analysis for U.S. health care reform. The 36 tables of data contained in the appendix provide detailed information for the 1960-90 period for the 24 countries.

Recent data revisions

The OECD data base has been extensively described elsewhere, with the most recent revisions fully described in the OECD publication OECD Health Systems. Facts and Trends (Organization for Economic Cooperation and Development, 1992b; Schieber and Poullier, 1991). In addition to new data for 1990, the health expenditure series for Australia, Belgium, Canada, Iceland, Ireland, Italy, the Netherlands, Spain, and Sweden have been substantially revised.(1) In several other countries (including Denmark, Finland, France, Greece, and the United Kingdom), minor adjustments to the historical data have been made. More comprehensive information on Turkey has also been obtained.

Underlying economic data series have also been revised-most notably the GDP and GDP deflators for the United States. The generally upward revision of the U.S. GDP has resulted in a lowering of previously reported ratios of health expenditures to GDP for the United States by as much as 0.3 percentage points for the more recent years. (For example, based on the new GDP series, the U.S. ratio in 1990 is 12.1 percent instead of 12.4.) Similarly, the GDP series for Germany, Luxembourg, Spain, and the United Kingdom have been revised.

Another major and important revision concerns the purchasing power parities (PPPs), the rate used to convert different national currencies into one numeraire currency. The PPPs for all countries have been recalculated on the basis of a new 1990 survey, and the historical data have been revised.(2) Previous PPPs were based on a 1985 benchmark.

The population figures for a number of countries have also been revised. The censuses conducted in many countries in 1990 and 1991, including the United States, affect the per capita figures for the past decade as countries adjust population estimates based on these most recent census tabulations.

Expenditure performance measures

There are many ways to measure the expenditure performance of health systems (Schieber, 1990). Expenditure levels and rates of growth(3) Can be measured in each country's national currency or converted into one numeraire currency (e.g., U.S. dollars). Expenditures can be adjusted for population and inflation. Health expenditure levels and growth can be compared with the level and growth in the overall economy as measured by GDP, national income, or some other macroeconomic aggregate. Comparing expenditures in one numeraire currency is more problematic than comparisons in national currencies because of the assumptions and underlying data that go into the construction of purchasing power parities and the lack of reliable PPPs for health. …

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