health expenditure trends: what are the key issues for policy-makers?
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HEALTH EXPENDITURE TRENDS: WHAT ARE THE KEY ISSUES FOR POLICY-MAKERS?. Eva Orosz and David Morgan Organisation for Economic Co-operation and Development 7 th European Health Forum Gastein 6 – 9 October, 2004. Main purposes of work related to the System of Health Accounts at OECD. - PowerPoint PPT PresentationTRANSCRIPT
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HEALTH EXPENDITURE TRENDS: WHAT ARE THE KEY ISSUES FOR POLICY-
MAKERS?
Eva Orosz and David Morgan Organisation for Economic Co-operation and
Development
7th European Health Forum Gastein6 – 9 October, 2004
2
Main purposes of work related to the System of Health Accounts at OECD
To provide / facilitate policy-relevant, comparative data and analysis on
health expenditure harmonisation across national health accounting
practice methodological development in health accounting data sources for research
www.oecd.org/health/sha
3
Recent analytical work concerning health expenditure
Health at a Glance. OECD 2003 Bains, M. and Oxley, H.: Aging-related Spending
Projections on Health and Long-term Care. In: Towards High-Performing Health Systems. Policy Studies, OECD, 2004
Orosz, E and Morgan, D: SHA-based Health Accounts in Thirteen OECD Countries: A Comparative Analysis. OECD Working Papers, No.16.
SHA-based Health Accounts in Thirteen OECD Countries. Country Studies. OECD Health Technical Papers 1 to 13
4
Key questions proposed for discussion
1) How can the excess growth of health expenditure be interpreted?
2) Is it possible to move towards a smoother (longer-term) adjustment of public spending to economic circumstances?
3) To what extent can policy influence the key determinants of health expenditure growth?
4) Do we have a reliable picture of the structure of public spending on health?
5) Do we have a reliable picture of the role of private spending on health care?
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Figure 1. Health expenditure as percentage of GDP, 2002
Slovak RepublicKoreaPolandMexico
LuxembourgIrelandFinland
Czech RepublicSpain
United KingdomAustriaJapan
HungaryNew Zealand
ItalyEU15
NorwayDenmark
NetherlandsBelgiumAustraliaSwedenPortugalGreeceCanadaFranceIceland
GermanySwitzerland
United States
Source: OECD Health Data 2004, 2nd edition.
14.611.2
10.99.9
9.79.69.5
9.39.29.19.19.1
8.88.7
8.58.5
7.87.87.77.77.6
7.47.37.3
6.26.16.1
5.95.7
8.5
0246810121416
Source PrivatePublic
-2 -1 0 1 2 3 4 5
1982-921992-2002
% of GDP Change in % of GDP, 1992-2002
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Figure 1b. Public expenditure on health as percentage of GDP, 2002
MexicoKoreaTurkeyPolandGreece
Slovak RepublicLuxembourg
SpainAustriaIrelandHungaryFinlandAustraliaEU-15
United KingdomJapanItaly
SwitzerlandPortugalBelgium
United StatesNew Zealand
CanadaCzech Republic
DenmarkNorwayFranceSwedenIceland
Germany
Source: OECD Health Data 2004, 2nd edition.
8.68.3
7.97.47.47.3
6.86.76.66.66.56.56.56.46.46.4
6.25.55.55.55.45.45.3
5.15
4.44.2
3.22.8
6.4
012345678910 -2 -1 0 1 2 3 4 5
1982-921992-2002
% of GDP Change in % of GDP, 1992-2002
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Different interpretations of excess growth of public (and total) expenditure on health
Poses a greater burden on the public budget – thus should be avoided.
Reflects structural changes in national economies: greater spending on health services reflects the growing role of the whole service sector.
It is an investment in long-term economic development.
Advances in health care and the increased demand is inherent as increasingly wealthy and ageing populations require continuous increase.
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Figure 2. Real annual growth rates, Public Expenditure on Health and GDP, EU15
GDP
GDP
Public Exp. on Health
Public Exp. on Health
-2
0
2
4
6
8
10
1979-1980
1980-1981
1981-1982
1982-1983
1983-1984
1984-1985
1985-1986
1986-1987
1987-1988
1988-1989
1989-1990
1990-1991
1991-1992
1992-1993
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
1998-1999
1999-2000
2000-2001
2001-2002
Rea
l ann
ual g
row
th in
Pub
lic E
xp. o
n H
ealth
, %
-6
-4
-2
0
2
4
6
Rea
l ann
ual g
row
th in
GD
P, %
Source: OECD Health Data 2004, 3rd edition .
-2
0
2
4 0
2
4
6
Note: The left hand axis refers to GDP growth and the right-hand axis to Public Expenditure on Health.Source: OECD Health Data 2004, 2nd edition.
9
How to adjust public spending to economic circumstances?
Have countries tended to over-react to economic ups-and-downs in respect of managing their public spending on health?
Is this short-term attachment of public spending to GDP-growth unavoidable?
Would it be possible to shift toward a smoother long-term adjustment of public expenditure on health to economic growth?
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Figure 3. Public expenditure on Pharmaceuticals
Source: OECD Health Data 2004, 2nd edition. * in real terms calculated at 1995 GDP price levels.
Australia
Canada
Czech Republic
Denmark
France
Germany
Greece
Hungary
Iceland
Ireland
Italy
United States
Poland
Spain
Sweden
Turkey
0153045
19922002
% of Total public expenditure on health
0 15 30 45
% contribution to change* in Total public exp. on health 1992-2002
Pharma
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To what extent can policy influence the key determinants of health expenditure growth?
Public pharmaceutical expenditure has been increasing faster than other components of publicly financed health care
However, figures shows that countries with very similar situations (i.e. similar per capita expenditure and similar growth rate in total expenditure) experienced very different trends.
12
Do we have reliable figures on spending structure?
SHA-based Health Accounts in Thirteen OECD Countries. OECD Working Papers, No.16
System of Health Accounts allows for a more reliable analysis of how financial resources are allocated among functions and service providers
In-patient curative-rehabilitative care occupies a far smaller share of health expenditure than hospitals
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Figure 4. Hospital and In-patient Curative-rehabilitative Expenditure
-
10
20
30
40
50
60
Australia Canada Denmark Germany Hungary Japan Poland Spain Switzerland Turkey
Hospital Expenditure Curative-rehabilitative (in-patient)
Source: “SHA-Based National Health Accounts in Thirteen OECD Countries: A Comparative Analysis” (OECD Health Working Papers No. 16)
% current exp. on health
14
Figure 5. Public share of health expenditure, 1980 and 2002
Source: OECD Health Data 2004, 3rd edition.
%97
93 93
89 88
85
82 80 80 79 79
76
71
69
64
56
42
91
85 85
83 83
85
75 76
71
76
79
70
82
70 71
53
45
30
40
50
60
70
80
90
100
Cze
ch R
epub
lic
Luxe
mbo
urg
Sw
eden
Uni
ted
Kin
gdom
Den
mar
k
Nor
way
Irela
nd
Fran
ce
Spa
in
Finl
and
Ger
man
y
Can
ada
Japa
n
Aus
tria
Por
tuga
l
Gre
ece
Uni
ted
Sta
tes
1980 2002
Source: OECD Health Data 2004, 2nd edition.
15
Do we have a reliable picture of the role of private spending on health care?
Private sector may play a very different role in financing a particular type of service.
The fact that the whole health care system is primarily publicly financed does not entail that public financing plays the dominant role in every area.
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Figure 6. The financing of in-patient, out-patient care and pharmaceuticals
Source: “SHA-Based National Health Accounts in Thirteen OECD Countries: A Comparative Analysis” (OECD Health Working Papers No. 16)
Out-patient expenditure
71
60
66
77
45
82
49
60
48
45
29
40
34
23
55
18
51
40
52
55
58 42
0 25 50 75 100
AustraliaCanada
DenmarkGermanyHungary
JapanKorea
PolandSpain
SwitzerlandTurkey
Out-patient exp.=100
Public sector share of out-patient Private sector share of out-patient
Pharmaceutical expenditure
56
34
53
74
61
66
55
63
63
44
66
47
26
39
34
45
37
37
35
73
65
27
0 25 50 75 100
AustraliaCanada
DenmarkGermanyHungary
JapanKorea
PolandSpain
SwitzerlandTurkey
Pharma. Exp.=100
Public sector share of pharma. exp. Private sector share of pharma. exp.
In-patient expenditure
74
86
97
83
88
90
66
97
60
85
26
14
3
17
12
10
34
3
40
15
88 12
0 25 50 75 100
AustraliaCanada
DenmarkGermanyHungary
JapanKorea
PolandSpain
SwitzerlandTurkey
In-patient exp.=100
Public sector share of in-patient Private sector share of in-patient
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Additional Figures if Questions
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GERMANY
GDP
GDP
Public Exp. on Health
Public Exp. on Health
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
1979-1980
1980-1981
1981-1982
1982-1983
1983-1984
1984-1985
1985-1986
1986-1987
1987-1988
1988-1989
1989-1990
1990-1991
1991-1992
1992-1993
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
1998-1999
1999-2000
2000-2001
2001-2002
Rea
l ann
ual g
row
th in
Pub
lic E
xp. o
n H
ealth
, %
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
Rea
l ann
ual g
row
th in
GD
P, %
19
FRANCE
GDP
GDP
Public Exp. on Health
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
1979-1980
1980-1981
1981-1982
1982-1983
1983-1984
1984-1985
1985-1986
1986-1987
1987-1988
1988-1989
1989-1990
1990-1991
1991-1992
1992-1993
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
1998-1999
1999-2000
2000-2001
2001-2002
Rea
l ann
ual g
row
th in
Pub
lic E
xp. o
n H
ealth
, %
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
Rea
l ann
ual g
row
th in
GD
P, %
20
SWEDEN
GDPGDP
Public Exp. on HealthPublic Exp. on Health
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
1979-1980
1980-1981
1981-1982
1982-1983
1983-1984
1984-1985
1985-1986
1986-1987
1987-1988
1988-1989
1989-1990
1990-1991
1991-1992
1992-1993
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
1998-1999
1999-2000
2000-2001
2001-2002
Rea
l ann
ual g
row
th in
Pub
lic E
xp. o
n H
ealth
, %
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
Rea
l ann
ual g
row
th in
GD
P, %
21
UK
GDP
GDP
Public Exp. on HealthPublic Exp. on Health
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
1979-1980
1980-1981
1981-1982
1982-1983
1983-1984
1984-1985
1985-1986
1986-1987
1987-1988
1988-1989
1989-1990
1990-1991
1991-1992
1992-1993
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
1998-1999
1999-2000
2000-2001
2001-2002
Rea
l ann
ual g
row
th in
Pub
lic E
xp. o
n H
ealth
, %
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
Rea
l ann
ual g
row
th in
GD
P, %