Health spending is rising in OECD

Expenses on heath in the Organisation for Economic Co-operation and Development (OECD)  has kept on growing faster than countries’ economies. OECD Health Data 2007 also notes that a growing share of the economy is devoted to health across OECD countries. Per capita health spending increased by more than 80% in real terms between 1990 and 2005 on an average in OECD countries, outpacing the 37% growth in GDP per capita.

It is estimated that between 1990 and 2005, per capita health spending, from public and private sources, rose by more than twice as much as per capita gross domestic product (GDP). One in four OECD countries now spends more than 10% of its income on health. In America the expenses on health is the highest, constituting 15.3 percent of national income to health; followed by Switzerland (11.6%), France (11.1%) and Germany (10.7%). The increased expenses on health is putting pressure on public coffers and patients’ wallets. As long as health expenses grow at a faster rate than that of the economy, governments have a tough choice to make. Governments can raise taxes (for resource collection, mobilisation and allocation without affecting fiscal deficit), reduce other spending (particularly on loss making public sector units) or make people pay out of their own pocket (by allowing market forces to play the key role).

The newly released  OECD Health Data 2007 shows that the number of doctors in OECD countries has increased by 35% over the past fifteen years to 2.8 million. In most OECD countries, this growth was driven largely by rising numbers of specialists

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