U.S. spends more on healthcare, but not on social services spending, study finds

By | August 16, 2019

There’s broad consensus that the U.S. spends too much on healthcare, but it’s not because it doesn’t invest enough in social services, according to a new study published in Health Affairs.

Using data over a 35-year period, from 1980 to 2015, the research compared healthcare spending and social spending among 35 countries in the Organization for Economic Cooperation and Development.

The verdict? Countries that spent more on social services tended to spend more on health care, even after adjusting for poverty and unemployment rates, as well as the proportion of people older than 65.

WHAT’S THE IMPACT

The researchers posed three main questions: How does the U.S. compare to other OECD countries in terms of social spending? Do countries that spend less on social services spend more on healthcare? And is there any evidence that increases in social spending over time are associated with decreases in health care spending?

Average healthcare spending across the OECD was about 8.8% of each country’s  gross domestic product in 2015, but the U.S. was an outlier, spending 16.8 percent of GDP.

For social spending, however, the U.S. spent 16.1% of GDP, slightly below the average for OECD countries that year (17%) but above the average when education is included in social spending (19.7 vs. 17.7% of GDP).

Relative to the average of OECD countries, a greater proportion of U.S. social spending comes from private sources and is particularly concentrated on spending for elderly residents, the findings showed.

Ultimately, when examining changes over time, researchers found additional evidence for a positive relationship between social and health spending: Countries with the greatest increases in social spending also had larger increases in healthcare spending.

THE LARGER TREND

National health spending showed signs of acceleration during the first quarter of 2019, according to a May Altarum report. At $ 3.76 trillion — a seasonally adjusted annual rate — health spending in March was 4.6 percent higher than it was in March 2018. The March 2019 nominal GDP growth over a 12-month period was 4.6 percent, and the resulting health spending share of GDP was 17.9 percent.

Twitter: @JELagasse

Email the writer: jeff.lagasse@himssmedia.com

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