Health: Improving health care efficiency key to curbing spiraling costs
29/11/2010 – Governments must make their health care systems more efficient if they are to maintain quality of care without putting further stress on public finances, according to a new OECD report.
In Health Care Systems: Efficiency and Policy Settings, the OECD warns that cash-strapped governments no longer have the option of boosting spending to improve health outcomes, as they have done over the past several decades.
“Health care is now one of the largest government spending items, representing on average 15% of government spending across the OECD, and costs are still rising,” says OECD Secretary-General Angel Gurria. “The economic and financial crisis has weighed heavily on public finances, reinforcing the need to improve health care efficiency.”
The OECD report recognises that the sharp rise in health care spending – which has grown by more than 70% per capita in real terms since the early-1990s – led to steady improvements in health outcomes across the OECD. Life expectancy has increased by one year every four years, survival rates from diseases like cancer are up, and premature births and infant mortality have dropped dramatically.
However, cross-country comparative analysis highlights the uneven health care efficiency performance across the OECD countries.
Australia, Japan, Korea, Switzerland and Iceland get the best health outcomes for money spent. Denmark, Greece, Hungary, the Slovak Republic and the United States have the widest margin for improving health outcomes without increasing spending.
Exploiting efficiency gains would allow countries to continue improving the quality of care while holding costs constant, according to the report. Adoption of best practices could reduce costs by nearly 2% of GDP by 2017 across the OECD, as compared to a no-reform scenario, while savings could be above 3% of GDP in Greece, Ireland and the United Kingdom.
If all countries were to become as efficient as the best performers, life expectancy at birth could be raised by more than two years on average across the OECD area, without any increased health care spending. By way of comparison, a 10% increase in health care spending would only increase life expectancy by three to four months, if the extent of inefficiency remains unchanged.
The new report is based on a unique health care policy data set gathered from 29 OECD countries, which are grouped into six newly-defined types of health care systems, ranging from those that rely principally on private insurance and markets to those where governments take the lead. The report investigates the links between policy choices and health system efficiency and makes specific suggestions for improvements on a country-by-country basis.
The main findings and country reports are available here. The full report is available to journalists in English on the OECD's password-protected website.
Further information is available from Isabelle Joumard, Senior Economist, Tel.: +33 1 45 24 90 97, e-mail: Isabelle.email@example.com; or Peter Hoeller, Head of Division, Tel.: +33 1 45 24 87 82, e-mail: firstname.lastname@example.org.