1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Improving Cost-Effectiveness in the Health Care Sector in Iceland

Health outcomes and the quality of health care in Iceland are very good by international comparison, while income-related health inequality appears to be smaller than in most other countries. However, the health-care system is costly and, according to OECD estimates, public expenditure on health and long-term care could reach 15% of GDP by 2050 if no restraining measures are taken. This highlights the importance of raising cost-effectiveness and spending efficiency more generally. To this end, it would seem advisable to remove impediments to private provision and open up the health sector to competition. At the same time, the introduction of cost-sharing should be considered where it does not exist (as in hospitals), although concerns about equity need to be taken into account. This would relieve the burden on public finances, as would the introduction of spending ceilings, cost-efficiency analysis and activity-based funding arrangements. The high cost of pharmaceuticals should be reduced by promoting competition and the use of inexpensive generic drugs.

English

Keywords: Iceland, health status, health care, spending efficiency, public spending
JEL: C23: Mathematical and Quantitative Methods / Single Equation Models; Single Variables / Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models; I12: Health, Education, and Welfare / Health / Health Behavior; O57: Economic Development, Innovation, Technological Change, and Growth / Economywide Country Studies / Comparative Studies of Countries; H51: Public Economics / National Government Expenditures and Related Policies / National Government Expenditures and Health; H73: Public Economics / State and Local Government; Intergovernmental Relations / State and Local Government; Intergovernmental Relations: Interjurisdictional Differentials and Their Effects
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