Health expenditure by provider

Health care is delivered by a wide variety of providers, ranging from hospitals and medical practices to ambulatory facilities and retailers. This affects expenditure patterns for different goods and services. Analysing health spending by provider can be particularly useful when considered alongside the functional breakdown of health expenditure, giving a fuller picture of the organisation of health systems (see indicator “Health expenditure by type of service”).

As a result of differences in the organisation in health service delivery, there is significant impact on health expenditure by provider across countries. While activities delivered in hospitals accounted for the largest proportion of health system funding across OECD countries in 2019, at around 39%, this average was largely exceeded in both Turkey and Costa Rica, where hospital activities received around half of all financial resources (Figure 7.19). On the other hand, Germany and Canada spent less than 30% of the total health budget on hospitals.

After hospitals, the largest provider category is ambulatory providers. This category covers a wide range of facilities, with most spending relating to either medical practices including GPs and specialists (as in Austria, France and Germany) or ambulatory health care centres (as in Finland, Ireland and Sweden). Across OECD countries, care delivered by ambulatory providers accounted for around one-quarter of all health spending on average in 2019. Within this, around two-thirds of all spending related to GPs, specialist practices and ambulatory health care centres, and roughly one-fifth related to dental practices. Overall spending on ambulatory providers in 2019 exceeded 30% of all health spending in Israel, Belgium, the United States, Mexico and Germany, but remained less than 20% in Turkey, the Netherlands and Greece.

Other main provider categories include retailers (mainly pharmacies selling prescription and over-the-counter medicines), which accounted for 17% of all health spending in 2019, and residential LTC facilities (mainly providing inpatient care to people dependent on LTC), to which around one-tenth of total health spending can be attributed.

Across OECD countries, there is wide variation in the range of activities that may be performed by the same category of provider, reflecting differences in the structure and organisation of health systems. These cross-country differences are most pronounced in the hospital sector (Figure 7.20). Although inpatient curative and rehabilitative care define the primary activity of hospitals and therefore represent the majority of their expenditure, hospitals can also be important providers of outpatient care in many countries – for example, through accident and emergency departments, specialist outpatient units or laboratory and imaging services. In a few countries, they are also important providers of inpatient LTC infrastructure.

In countries such as Estonia, Denmark, Sweden, Finland and Portugal, outpatient care accounted for over 40% of hospital expenditure in 2019, since specialists typically receive patients in hospital outpatient departments. On the other hand, in Germany and Greece, hospitals are generally mono-functional, with the vast majority (more than 90%) of spending on inpatient care services, and very little outpatient and day care spending.

Furthermore, in recent years, many countries have also shifted some inpatient hospital services to day care departments owing to potential efficiency gains and reduction of waiting times (see indicator “Ambulatory surgery” in Chapter 5). This resulted in day care services accounting for 15% or more of all hospital expenditure in Belgium, France, Ireland and Portugal in 2019.

As many countries allocated additional resources to hospitals to cope with severe cases of COVID-19 and to be better prepared for future increases in demand, the total share of hospital expenditure in overall health spending may have increased in 2020. The composition of service delivery in hospitals will most likely also have changed in many countries, as elective day surgeries were frequently postponed and more inpatient capacity built up.

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