What is the relationship between social spending and health care spending, particularly in high-income countries? A new study, being released ahead of print by Health Affairs, evaluated data from the Organization for Economic Cooperation and Development (OECD) on 35 OECD member states spanning the period 1980–2015, to answer three questions: How does the US compare to other OECD countries in terms of social spending? Do countries that spend less on social services spend more on health care? Is there any evidence that increases in social spending over time are associated with decreases in health care spending? The authors found that average health care spending across the OECD was approximately 8.8 percent of each country’s gross domestic product (GDP) in 2015, but the US was an outlier, spending 16.8 percent of GDP. For social spending, however, the US spent 16.1 percent of GDP, slightly below the average for OECD countries that year (17.0 percent) but above the average when education is included in social spending (19.7 percent versus 17.7 percent of GDP). According to the authors, relative to the average of OECD countries, a greater proportion of US social spending comes from private sources and is particularly concentrated on spending for elderly residents.
“As our results show, while the US is an outlier in terms of health care spending, its social spending is very close to the OECD average,” the authors conclude. “Across the OECD, we observed that countries that spent more on social programs tended to spend more on health care…. [However,] these findings should not be interpreted as suggesting that social spending might not be effective at lowering health care costs for subpopulations.”
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