Trends in the health spending to GDP
ratio are the result of the combined effect of trends in both GDP and health expenditure.
Apart from Luxembourg, health spending has grown more quickly than GDP since 2000. This
has resulted in a higher share of GDP allocated to health on average across OECD
In 2009, OECD countries devoted 9.6%
of their GDP to health spending (Figure 7.2.1 and Table A.8), a sharp increase from 8.8% in 2008, following the recession
that started in many countries in 2008 and became widespread in 2009. The rise in the
health spending share of GDP was particularly marked in countries hard hit by the global
recession. In Ireland, the percentage of GDP devoted to health increased from 7.7% in 2007
to 9.5% in 2009. In the United Kingdom, it rose from 8.4% in 2007 to 9.8% in 2009.
In 2009, the United States spent 17.4%
of GDP on health, 5 percentage points more than in the next two countries, the Netherlands
and France (which allocated 12.0% and 11.8% of their GDP on health). Of the OECD
countries, Mexico and Turkey spent less than 6.5% of their GDP on health. The fast-growing
economies of China and India spent 4.6% and 4.2% respectively in 2009, while South Africa
and Brazil allocated 8.5% and 9.0% of GDP to health.
The share of public expenditure on
health to GDP varies from a high of 9.8% of GDP in Denmark to lows of 4.0% and 3.1% of GDP
in Korea and Mexico, respectively. In these two countries, health spending is more evenly
split between public and private financing compared to other OECD countries.
For a more comprehensive assessment of
health spending, the health spending to GDP ratio should be considered together with per
capita health spending (see Indicator 7.1
"Health expenditure per capita" ). Countries having a
relatively high health spending to GDP ratio might have relatively low health expenditure
per capita, while the converse also holds. For example, Portugal and Sweden both spent a
similar proportion of their GDP on health at around 10% of GDP; however, per capita
spending (adjusted to USD PPP) was close to 50% higher in Sweden (Figure 7.1.1).
Since 2000, after a period of early
growth in the health spending to GDP ratio, there was a period of relative stability
until 2009 (Figure 7.2.2). The subsequent reduction in GDP, due to the
economic downturn, has led to a rise in the health spending to GDP ratios. The experience
from previous recessions shows that, in many countries, the health spending share of GDP
has tended to go up strongly during periods of economic downturns, and then to stabilise
or go down only slightly during periods of economic recovery. Looking back at the
experience following the recession in the early 1990s, some countries such as Canada and
Finland did substantially reduce public expenditure on health to cut down their budgetary
deficits, leading to a noticeable reduction in the health spending share of GDP over a few
years. But these reductions in public spending on health proved to be short-lived and,
after a few years of cost-containment, growing demand for and supply of health services
led to a revival of health expenditure growth exceeding GDP growth again (Scherer and
Health spending per capita since 2000
has increased more than two times faster than economic growth on average across OECD
countries (4.0% versus 1.6%), resulting in an
increasing share of the economy devoted to health in most countries (Figure 7.2.3).
Definition and comparability
See Indicator 7.1
"Health expenditure per capita" for the definition of
total health expenditure.
Gross Domestic Product (GDP) =
final consumption + gross capital formation + net exports. Final consumption of
households includes goods and services used by households or the community to satisfy
their individual needs. It includes final consumption expenditure of households,
general government and non-profit institutions serving households.
In countries, such as Ireland and
Luxembourg, where a significant proportion of GDP refers to profits exported and not
available for national consumption, GNI may be a more meaningful measure than GDP.