Health expenditure on primary health care

Primary health care is the cornerstone of an efficient, people-centred and equitable health system. Strengthening primary care has been identified as an effective way to improve care co-ordination and health outcomes and reduce wasteful spending, by limiting unnecessary hospitalisations and associated costs in hospitals and other parts of the health system. However, in many OECD countries, primary care has not yet realised this potential fully (OECD, 2020[7]).

Primary health care is a complex concept that stretches across different types of service and provider. No definitive consensus exists on which services or providers should be included, and countries may have different national notions of what activities it should entail. Here, primary health care uses the reported spending estimates for a range of services (collectively termed “basic care services”) covering general outpatient, dental and home-based curative care, as well as preventive services when provided by ambulatory care providers – meaning that the same services provided in hospitals or as outpatient specialist care are not included. Using this as a proxy measure, primary health care accounts for around 13% of health spending on average across OECD countries, ranging from 10% and less in Luxembourg, the Netherlands, the Slovak Republic and Switzerland to 17% or more in Poland, Australia, Lithuania and Estonia (Figure 7.17). Primary health care spending as a share of total health spending has remained relatively constant over the last five years in many OECD countries, suggesting expenditure growth in line with overall health spending. Exceptions to this are Lithuania and Latvia – where the share of primary health care spending has increased by around 1 percentage point over the last five years – and Spain, Finland and Australia, where this proportion has dropped since 2013.

On average, half of primary care spending across OECD countries is on general outpatient care services, with a further 38% related to dental care. Prevention services (8%) and home visits by general practitioners (GPs) or nurses (3%) make up a much smaller proportion of spending on primary care, although services related to prevention activities may often be hard to distinguish from general outpatient consultations. At a country-specific level, general outpatient care provided by ambulatory providers is particularly high in Australia, Mexico and Poland, reaching around 12% of all health spending. In Canada, Switzerland, Austria, Germany and Luxembourg, spending on general outpatient care is much lower overall, accounting for less than 5% of health spending (Figure 7.17).

In Lithuania and Estonia, the large share of primary care in overall health spending can be explained by spending on dental care, which accounts for half of primary health care spending. In both countries, dental care accounts for 9% of the total health budget – nearly twice the OECD average. This compares with Poland, Belgium, the Netherlands and the United Kingdom, where dental care spending represents only around 3% of total health spending.

The “basic care services” described above can be delivered in various settings, including hospitals. The proportion of spending on these services that is delivered by the ambulatory care sector could be interpreted as a rudimentary measure of allocative efficiency, since it could indicate what is delivered in the most appropriate setting. Nevertheless, at this aggregate level, the cross-country comparability of this indicator remains limited owing to the diversity of organisational models for primary health care across OECD countries. For example, some countries may have established dedicated primary health care units within hospitals. Across OECD countries, 80% of all basic care spending is on services delivered by ambulatory care providers (Figure 7.18). This share stood at 90% or more in Mexico, Germany, Latvia, Spain, Denmark, Lithuania and Belgium but was less than 70% in Luxembourg, Canada and Switzerland.

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