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Where are Healthcare Costs Rising the Fastest?


Hint: It’s not the U.S.

I was nosing around the OECD stats on health spending, which include the category “Total expenditure on health, Per capita US$ PPP” (PPP stands for “purchasing power parity”, which is the right way to adjust prices across countries). So just for fun, I decided to figure out how fast healthcare costs were rising in different countries.

This chart shows the average annual change in per capita spending on health between 1990 and 2007 (the last available year for most countries). The U.S. shows up almost exactly in the middle of the pack. This is not an artifact of the years picked—it’s true for 1997-2007 and 2000-2007 as well.

It’s interesting to see that the UK, with its “socialized medicine,” actually had faster health spending growth than the U.S., at least according to these figures. On the other hand, other countries with single-payer systems, such as Canada, had slower growth.

Frankly, it’s not clear to me from these figures that the form of organization of a health care system has that much effect on the growth rate of health spending.

Some caveats here: Countries have different rates of aging and different rates of economic growth, which can affect these results. In addition, the U.S. has a much higher absolute level of health spending than anyone else ($7290 per capita in 2007—the next highest was Norway at $4763). The country with the fastest rate of growth, South Korea, still spends less than $1700 per person on health, way below the U.S.


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