It is well-known that the US is an outlier for total expenditure on health care, but few know that US public expenditure on health care is about average for an OECD high-income country. The OECD definition of public expenditure excludes tax expenditures. If the cost of tax breaks for employer-provided private insurance were included, US public spending on health care would be much higher than the OECD average.
While the United States has had above average total spending, its public expenditures are in line with other countries. At 7.4% of GDP, public expenditures in the U.S. on health are only 0.2% above the 15-country average (Exhibit 9). Conversely, the United States has much more private sector spending as a percentage of GDP. Exhibit 10 illustrates the proportion of public and private spending among the 15 countries. Private health spending accounts for 8.5% of the U.S.’ GDP, 4 percentage points more than Switzerland (4.4%), the next largest private sector spender.
Kaiser Family Foundation, Health Care Spending in the United States and Selected OECD Countries, April 2011. (The data source is OECD Health Statistics 2010 database.)
Exhibit 9: Public Health Expenditure as a Percentage of GDP, U.S. and Selected Countries, 2008
Exhibit 10: Public and Private Health Expenditures as a Percentage of GDP, U.S. and Selected Countries, 2008
Despite incentives for private insurance and considerable expenditure of public money, health insurance coverage in the US is only slightly better than Chile, Mexico and Turkey, and far below the universal or near universal coverage observed in other OECD member countries. The following chart, from OECD Health at a Glance 2011, illustrates this nicely.
With respect to yesterday’s chart, “Percentage of Americans living in household receiving government benefits”, at least 19 OECD countries would score 100%, on the basis of government health insurance alone! Hong Kong (not in the OECD) would also score 100%, because it provideds universal health care with a scheme similar to Britain’s NHS. The US, in contrast, scores less than 50%.
