A Global Slowdown in Health Care Spending? Not So Fast

by JHI Staff on July 16, 2014

The Journal of the American Medical Association recently published a study entitled “The Global Slowdown in Health Care Spending Growth.” The study looks at spending data gathered in a report from the Organization for Economic Cooperation and Development, and observes the following about “excess health care spending growth,” or growth in health care spending that exceeds the growth of the economy:

In recent years, rates of excess health care spending in the United States and OECD have declined below their historical norms; in 2010 and 2011 (and 2012 for countries with available data), excess spending was either negligible or negative. The slowdown in health care spending growth has been a global phenomenon; in fact, US excess growth in 2010 and 2011 was slightly higher than average relative to other industrialized countries.

The article doesn’t specify which countries are included, other than to say it’s the OECD countries with data from 1980 to 2011. Apparently it relied on a list found in the OECD report. Excluding countries without data from 1980 to 2011, that leaves 23 countries—23 of the most industrialized, affluent countries in the world.

Because these 23 countries have long boasted extensive health care systems, and can with their affluent populations afford heavy infrastructure investment, they do of course constitute the lion’s share of health care spending in the world. Thus it’s perfectly accurate to say a slowdown in spending from these countries represents a global slowdown, because what these countries do will swamp whatever is happening elsewhere combined in terms of total spending levels.

But at the same time, calling the slowdown a global one is a bit misleading. It may be “global” in terms of total spent, but I suspect that if you looked at all countries around the world, and weighted spending growth by size of population covered rather than by absolute spending amounts, the results would be very different. (I wish I had the data at hand to make this calculation, but the availability of data is heavily biased toward the industrialized countries.)

In fact, I’d bet a more comprehensive, population-based look at global spending (that is, average percentage spending increase per capita) would reveal a global increase in health care spending. After all, that larger list of countries would include some pretty populous nations that have seen vigorous growth in health care investment in recent years, including China, India, Brazil, and in fact almost all of Asia and South America, where investment growth in health care (and infrastructure in general) has been strong. Many countries in Africa, too, have been investing. The great majority of countries in these regions are not on the list considered in the study—a pretty big group to leave out.

The world as a whole is seeing more and better health care. The most industrialized countries may be lagging in that growth in recent years, but that means the less- and more-recently industrialized worlds are working to close the health care gap. You’d expect a steeper growth curve for countries that have been relatively lacking in modern health care infrastructure, whereas mature systems like those found on the OECD list are more likely to take a breather from rapid growth, especially as they try to limit health care costs.

Accelerating that closing of the spending gap is the fact that global investment has been shifting to emerging and less-fully industrialized markets, as these countries build their infrastructures. What’s more, we’ve been seeing a mostly steady rise in democracy, larger middle classes, and better access to education and information in these markets. Many of these populations now for the first time can afford modern health care infrastructure, are aware of what they’ve been missing, and have the political clout to demand improvement. We’re seeing these trends in just about every less-fully industrialized region in the world.

None of this is to say the study was inaccurate, including in the way it used the term “global.” But I hope observers will avoid labeling health care trends that apply only to highly industrialized countries as “global” trends. It may be accurate to do so as a matter of numeric averages. But it tends to mask the large and important changes in health care taking place among a huge percentage of the planet’s population—a trend that should be celebrated, not obscured.

No Comments

Leave a Comment

You can use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Johns Hopkins Medicine does not necessarily endorse, nor does Johns Hopkins Medicine edit or control, the content of posted comments by third parties on this website. However, Johns Hopkins Medicine reserves the right to remove any such postings that come to the attention of Johns Hopkins Medicine which are deemed to contain objectionable or inappropriate content.

Previous post:

Next post: