Making health systems fitter

OECD Observer

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

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive print editions delivered to you directly


Online edition
Previous editions

Don't miss

  • Africa's cities at the forefront of progress: Africa is urbanising at a historically rapid pace coupled with an unprecedented demographic boom. By 2050, about 56% of Africans are expected to live in cities. This poses major policy challenges, but make no mistake: Africa’s cities and towns are engines of progress that, if harnessed correctly, can fuel the entire continent’s sustainable development.
  • “Nizip” refugee camp visit
    July 2016: OECD Secretary-General Angel Gurría visits the “Nizip” refugee camp, situated between Gaziantep and the Turkish-Syrian border, accompanied by Turkey’s Deputy Prime Minister Mehmet Şimşek. The camp accommodates a small number of the 2.75 million Syrians currently registered in Turkey, mostly outside the camps. In his tour of the camp, Mr Gurría visits a school, speaks with refugees and gives a short interview.
  • OECD Observer i-Sheet Series: OECD Observer i-Sheets are smart contents pages on major issues and events. Use them to find current or recent articles, video, books and working papers. To browse on paper and read on line, or simply download.
  • Queen Maxima of the Netherlands gives a speech next to Mexico's President Enrique Pena Nieto (not pictured) during the International Forum of Financial Inclusion at the National Palace in Mexico City, Mexico June 21, 2016.
  • How sustainable is the ocean as a source of economic development? The Ocean Economy in 2030 examines the risks and uncertainties surrounding the future development of ocean industries, the innovations required in science and technology to support their progress, their potential contribution to green growth and some of the implications for ocean management.
  • OECD Environment Director Simon Upton presented a talk at Imperial College London on 21 April 2016. With the world awash in surplus oil and prices languishing around US$40 per barrel, how can governments step up efforts to transform the world’s energy systems in line with the Paris Agreement?
  • Happy 10th birthday to Twitter. This 2008 OECD Observer interview with Henry Copeland said you’d do well.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Once migrants reach Europe, countries face integration challenge: OECD's Thomas Liebig speaks to NPR's Audie Cornish.

  • Message from the International Space Station to COP21

  • COP21 Will Get Agreement With Teeth: OECD Secretary-General Angel Gurría on Bloomberg

  • The carbon clock is ticking: OECD’s Gurría on CNBC

  • If we want to reach zero net emissions by the end of the century, we must align our policies for a low-carbon economy, put a price on carbon everywhere, spend less subsidising fossil fuels and invest more in clean energy. OECD at #COP21 – OECD statement for #COP21
  • They are green and local --It’s a new generation of entrepreneurs in Kenya with big dreams of sustainable energy and the drive to see their innovative technologies throughout Africa. blogs.worldbank.org
  • Pole to Paris Project
  • In order to face global warming, Asia needs at least $40 billion per year, derived from both the public and private sector. Read how to bridge the climate financing gap on the Asian Bank of Development's website.
  • How can cities fight climate change?
    Discover projects in Denmark, Canada, Australia, Japan and Mexico.
  • Climate: What's changed, what hasn't, what we can do about it.
    Lecture by OECD Secretary-General Angel Gurría, hosted by the London School of Economics and Aviva Investors in association with ClimateWise, London, UK, 3 July 2015.

  • Climate change: “We should not disagree when scientists tell us we have a window of opportunity–10-15 years–to turn this thing around” argues Senator Bernie Sanders.

  • In the long-run, the EU benefits from migration, says OECD Head of International Migration Division Jean-Christophe Dumont.
  • Is technological progress slowing down? Is it speeding up? At the OECD, we believe the research from our Future of ‪Productivity‬ project helps to resolve this paradox.
  • Is inequality bad for growth? That redistribution boosts economies is not established by the evidence says FT economics editor Chris Giles. Read more on www.ft.com.
  • Catherine Mann, OECD Chief Economist, explains on Bloomberg why "too much bank lending can slow economic growth".
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at www.oecd.org/careers .

Most Popular Articles

Poll

What issue are you most concerned about in 2016?

Unemployment
Euro crisis
International conflict
Global warming
Other

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2016