Spending on the various types of
health care services and goods is influenced by a wide range of factors: health system
constraints, such as access to hospital beds, medical staff and new technology, the
financial and institutional arrangements for health care delivery, as well as national
clinical guidelines and the disease burden within a country.
In 2009, curative and rehabilitative
care provided either as inpatient (including day care) or outpatient care accounted for
more than 60% of current health spending on average across OECD countries (Figure 7.3.1). The ratio of inpatient to outpatient spending can vary
according to the different organisational arrangements of health care providers and
clinical practice variation between countries. Austria and France, for example, report a
relatively high proportion of expenditure on inpatient care (amounting to more than a
third of health spending) which is mirrored by them having the highest levels of hospital
activity (see Indicator 4.4
"Hospital discharges" ). Conversely, countries such as
Portugal and Spain, with relatively low levels of hospital activity, allocate around a
quarter of health care resources to inpatient care.
Large differences remain between
countries in their expenditure on long-term care. Norway, Denmark and the Netherlands,
with established and extensive formal arrangements for elderly and disabled care, allocate
around a quarter of their total health spending to long-term care. By contrast, in eastern
and southern European countries, where care tends to be provided in more informal or
family settings, expenditure on long-term care accounts for a much smaller share of total
health spending (see Indicator 8.8
"Long-term care expenditure" ).
The other major category of health
expenditure is on medical goods, mostly accounted for by pharmaceuticals (see Indicator 7.4 "Pharmaceutical expenditure" ). At
19%, on average, the share of health spending on medical goods can be as low as 11-12% in
New Zealand, Denmark and Norway, but accounts for more than a third of all health spending
in Hungary and the Slovak Republic.
The growth in the various components
of care reflects in part the relative stage of development of health systems. With
inpatient care highly labour intensive and, therefore, expensive, certain high income
countries with developed health systems have sought to reduce the share of spending in
hospitals by shifting to more day surgery, outpatient or home-based care. However, this
shift can also reflect regulatory issues. Public spending in the United States is largely
Medicare and Medicaid related for which prices are tightly controlled. Thus, it can be in
the interest of hospitals to shift patients to ambulatory care where there are no controls
of the price of interventions (OECD, 2010b). Estimates of spending on ambulatory surgery
performed by independent physicians suggested that this has been the fastest growing area
of health care between 2003 and 2006 in the United States (McKinsey Global Institute,
2008). On the other hand, lower income OECD countries seeking to invest in and expand
their health systems have generally seen the growth in hospital inpatient care outpace
other areas of spending such that it has been the main contributor to overall health
expenditure growth (Figure 7.3.2).
Figure 7.3.3 shows the share of health expenditure allocated to health care
administration. On average, OECD countries allocated 3% of their spending to the
management and regulation of the health system. This also includes the administration and
operation of health insurance funds which goes some way to explaining the wide variations.
Generally those countries operating single payer tax-based health financing systems
(e.g. Denmark and Sweden) show a lower share of
health spending allocated to administration compared to countries with multi-payer social
insurance models, such as the United States, France and Germany.
Definition and comparability
The functional approach of the
System of Health Accounts defines the boundaries
of the health system. Total health expenditure consists of current health spending and
investment. Current health expenditure comprises personal health care (curative care,
rehabilitative care, long-term care, ancillary services and medical goods) and
collective services (public health services and health administration). Curative,
rehabilitative and long-term care can also be classified by mode of production
(inpatient, day care, outpatient and home care).
Factors limiting the comparability
across countries include estimations of long-term care expenditure. Also, in some
cases, expenditure in hospitals is used as a proxy for inpatient care services,
although hospital expenditure may include spending on outpatient, ancillary, and in
some cases drug dispensing services (Orosz and Morgan, 2004).
Information on data for Israel:
|Indicator in PDF
|7.3.1 Current health expenditure by function of health care,
|7.3.2 Growth in inpatient and outpatient care expenditure per
capita, in real terms, 2000-09 (or nearest year)
|7.3.3 Expenditure on health care administration
and insurance, 2009 (or nearest year)