Most industrialised countries use about nine percent of GDP for government health spending and about 11 percent of GDP for overall health spending (public and private combined). This chart from the World Bank (based on WHO data) shows the percentage of GDP spent by governments on health and this one the overall health spending.

 

The glaring special case is the United States. Its governments (federal, state and local) spend about as much as European countries on public provision (8.1 percent in the US versus, for example, 9.0 percent in France or 7.6 percent in the UK). The staggering part is that the US spends almost as much again in the private sector so that, in total, it spends 17.1 percent of GDP on health. Private spending is a very small factor in most of Europe so total expenditure in France is 11.7 percent and just 9.1 percent in the UK — almost half the US total. Public health outcomes are roughly similar between Western Europe and the USA.

 

The overall pattern in developing countries is for a very low level of domestic government spending on health: 1.2 percent in Indonesia, 1.9 percent in Kenya and 1.0 percent in Pakistan, for example. There are some cases of governments meeting their obligations well: The Maldives at 6.2 percent and Rwanda at 6.5 percent, for example. Some emerging economies with thoroughly democratic governments have a shameful record (1.3 percent and falling in India) while others do much better but not well enough (4.3 percent in South Africa, 4.7 percent in Brazil)

 

Total expenditure on health is still low in some big emerging economies (3.1 percent in Indonesia and 4 percent in India, for example) suggesting that people do not value health as much as they do other goods that they can buy (India has one of the highest rates of smartphone penetration in the world) or that they do not trust the medical system. In most emerging economies, though, total public and private health spending looks like Europe (9.7 percent of GDP in Brazil and 6.5 percent in Russia) suggesting that governments are forcing people to use personal resources because of government under-provision. Many African countries bear out this pattern with Nigeria’s government spending about 1 percent of GDP on public health provision with the Nigerian people spending another 3 percent from their own pockets.

 

It’s worth remembering a few caveats about these WHO / World Bank figures

 

  • They do not include most spending on health by donor governments and by charities. There is a worry that countries such as Uganda are becoming dependent on donor aid (6 percent of GDP was spent by government on health in 2010 but this had dropped to 4.2 percent in 2012 despite strong economic growth)
  • They are based on purchasing power parity (PPP) US dollars — a measure that some think overstates the spending power of poor countries. See here for a Wikipedia explanation
  • Because they look at spending a percentage of GDP, they can be very misleading. Brunei is a cheapskate on health however you look at it: 2.5 percent of GDP on total health spending, 2.3 percent on government health spending. But Brunei is a very rich cheapskate so 2.5 percent of GDP equates to almost $1,000 per person per year as this World Bank chart shows. Saudi Arabia is quite similar. However, Rwanda is in the opposite position. It spends a very decent percentage of its resources on health but it’s a poor country so the per capita total is just $71. By way of reference, most European countries spend about $4,000 per person per year; the US spends over $9,000. Note that these figures are in current US $ not PPP adjusted ones (see above)
  • The older the population, the more a country needs to spend on health. So, even if everything else were equal, you would expect Japan (median age of population 46.1) to spend more than India (median age 27)

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