Making health systems fitter

The following is a government health warning: just when you thought your health spending was under control, the cost pressures are likely to start rising again.

A bleak message, but like most health warnings, it should be taken seriously. Health expenditure came to some 8.4% of GDP in the OECD area in 2001, up more than a percentage point from a decade ago. US spending led the field, with nearly 14% of GDP, with Switzerland and Germany not far behind, at nearly 11% each. Yet, it is not a given that these countries deliver better health services than their neighbours. France devotes less of its GDP to health than the biggest spenders, yet enjoys a health status that is at least as good, or better. But French health budgets are also being stretched and reforms are in the pipeline. In fact, policymakers across the OECD, however well their health systems perform, are constantly being forced to look for ways to improve efficiency and value for money in their health systems.

Not that OECD achievements in cost control have been modest, on the contrary. Since the 1970s when spending spiralled upwards, governments have halved the rate of growth in health expenditure. So why should this trend change? Two reasons stand out: technology and age.

Technology has become a pillar of our health services. Whether imaging systems, cardiovascular equipment or dialysis machines, all affect the quality of care. Now, telemedicine is emerging, with reports of doctors using 3G mobile phones to transmit X-ray images for specialists to verify. New medicines and devices can certainly improve care and resulting outcomes. The trouble is, such advances, along with developments in pharmacology and biotechnology, are expensive, increasing the pressure to spend more on health.

Ageing presents several challenges. Health care costs leap from the age of 45, though they trail off again for the very old. Assuming today’s cost patterns continue, our experts project that population ageing will cause total health care spending to increase by an average of nearly 2% of GDP by 2050.

Merely finding savings is not the solution. If it were, then the case would be closed. In fact, cost-cutting can go too far, undermining efficiency and hurting the capacity to deliver even essential services, with extra funding, not less, then needed to improve effectiveness. Reforms, however necessary, can generate costs too, in management for instance, and running expenses can rise in the drive to treat more patients.

The public sector accounts for the greatest part of health spending in all but a few OECD countries, though even in these, the public purse takes much of the strain. Government spending action has tried a mix of capping, regulation and, increasingly for pharmaceutical spending, cost-sharing, with individuals taking more responsibility for their spending choices. But management solutions can only achieve so much and preventive action at the root of some illnesses is required.

Take obesity. Some call it the Western disease, conditioned largely by a lifestyle of fast food and sedentary habits at work and play. And it is getting worse. Barely a day goes by without a newspaper story highlighting the problems. Some cases are hard to prevent or treat, but much obesity is avoidable. How ironic that the developed world should conquer so many illnesses, and let this one in the back door.

No one chooses to be ill. Yet, we could do more to minimise risk. Education is vital, via both schools and the media. Such campaigns can work, as the sharp decline in smoking in many countries has shown. But are they enough? After all, many people still smoke, despite knowing the risks. And it is easier to attack smoking, which invades other people’s personal space. It gets trickier with other personal habits, even if sooner or later, the public purse may have to pay for the consequences.

Businesses are already sitting up. Some manufacturers are improving the content in food, and corporate leaders are encouraging healthier lifestyles among staff in a bid to save on their health bills. Legal cases are being fought, as are campaigns to have health warnings printed on fast food wrappers. Governments could ask questions too. They may encourage healthy diets, but do they do enough to encourage physical activity, such as by planning sports grounds and cycle tracks in cities?

The OECD’s health project is responding to such challenges facing developed countries. It was set up in 2001 with an ambitious three-year mandate to analyse health care systems so as to help improve their performances. Together with our unique health database, for which there is always strong demand, the project helps governments and other players understand the issues and map their way towards improved performance.

We know that disease prevention measures can be acted upon, whether dealing with weight, fitness or, indeed, tackling infectious diseases, as the SARS outbreak showed. But while they may help relieve some pressures on health care systems, controlling health expenditure growth in light of advances in medical technologies and ageing brings several challenges to the table: getting more value for money, while ensuring timely and equitable access to essential health care services; ensuring any reforms do not leave people behind; and tackling shortages of doctors and nurses – to name but a few. Also, new provision issues are emerging, like cross-border co-operation and mobility in patient care, trends that respond to the adage that if the market cannot move to the people, then people (along with the money) will move to the market.

The OECD can provide the intelligence, advice and frameworks, but only governments and citizens can act. No one can say they were not warned.

©OECD Observer No 238, July 2003

Economic data

GDP growth: +0.6% Q1 2019 year-on-year
Consumer price inflation: 2.3% May 2019 annual
Trade: +0.4% exp, -1.2% imp, Q1 2019
Unemployment: 5.2% July 2019
Last update: 8 July 2019

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