All OECD countries use a mix of public
and private sources to pay for health care, but to varying degrees. Public financing is
confined to government revenues in countries where central and/or local governments are
primarily responsible for financing health services directly (e.g. Spain and Norway). It comprises both general government revenues and
social contributions in countries with social insurance-based funding (e.g. France and Germany). Private financing, on the other hand,
covers households' out-of-pocket payments (either direct or as co-payments), third-party
payment arrangements effected through various forms of private health insurance, health
services such as occupational health care directly provided by employers, and other direct
benefits provided by charities and the like.
Figure 7.5.1 shows the breakdown of how health care services are paid for
across OECD countries in 2009. The public sector remains the main source of health
financing in all OECD countries, apart from Chile, Mexico and the United States. In the
Netherlands, the Nordic countries (except Finland), the United Kingdom, the Czech
Republic, Luxembourg, Japan and New Zealand public financing of health care accounted for
more than 80% of all health expenditure. On average, the public share of total health
spending was 72% in 2009, more or less unchanged over the last 20 years, although the
range has tended to narrow slightly. Many of those countries with a relatively high public
share in the early 1990s, such as the Czech Republic and the Slovak Republic, have
decreased their share, while other countries which historically had a relatively low level
(e.g. Portugal, Turkey) have increased their public
share, reflecting health system reforms and the expansion of public coverage.
After public financing, the main
financing source for health care are households themselves through so-called out-of-pocket
payments. These may be co-payments or cost-sharing arrangements with public or private
schemes, say for prescription pharmaceuticals, or simply direct payments borne directly by
a patient for services or goods. On average across OECD countries, the share of health
care expenditure covered by households was around 19% in 2009, ranging from lows of 6% and
7% in the Netherlands and France, to more than 30% in Korea, Mexico and Chile. In some
central and eastern European countries, the practice of informal payments means that the
level of out-of-pocket spending is probably underestimated.
Some countries have extended the
coverage of their public health systems in recent years and seen the burden on households
fall. In the case of Korea and Turkey, the share of health spending borne by households
has fallen by around 10 percentage points since 2000 (Figure 7.5.2). On the other hand, some eastern European countries with
traditionally high shares of public financing have seen charges shifted towards households
over the same period.
In general, a relationship can be seen
between out-of-pocket spending as a share of total health spending and the overall level
of health spending itself (Figure 7.5.3). The United States, France and
the Netherlands, as some of the highest spenders on of health care, also see households
financing a relatively small share of the health care costs directly, with the majority of
spending made through third-party arrangements - both public or private. Switzerland is
notable as having a significant share of its overall high health spending being paid
directly by households.
Definition and comparability
There are three elements of health
care financing: sources of funding (households, employers and the state), financing
schemes (e.g. compulsory or voluntary insurance),
and financing agents (organisations managing the financing schemes). Here
"financing" is used more in the sense of financing
schemes. Public financing includes general government revenues and social security
funds. Private financing covers households' out-of-pocket payments, private health
insurance and other private funds (NGOs and private corporations).
Out-of-pocket payments are
expenditures borne directly by the patient. They include cost-sharing and, in certain
countries, estimations of informal payments to health care providers.