New OECD report shows healthcare costs rapidly increasing


The report -"Fiscal Sustainability of Health Systems: Bridging Health and Finance Perspectives" finds that going over budget on health spending remains endemic in most OECD countries. Maintaining today’s healthcare, and funding future medical advances, will be difficult without major reforms that will require health and finance ministries to work together, it says.

Although the crisis led to a slowdown in health spending growth, particularly in Europe, public expenditure on health and long-term care in OECD countries is set to increase from around 6% of GDP today to almost 9% of GDP in 2030 and as much as 14% by 2060, unless governments can contain costs.

Health spending has risen faster than economic growth in all OECD countries over the past 20 years, and public funds still account for around three-quarters of health spending. Many countries remain heavily reliant on payroll taxes, which will decline as their population ages.

Upward pressure on health spending comes from new technology in medical services, rising incomes driving higher expectations, and the growing needs of ageing populations.

In Austria, the Czech Republic, Germany, Korea, Poland, the Slovak Republic and Slovenia, more than 70% of government financing for health comes from salary contributions. Other than in France, “sin taxes” in the form of higher value-added taxes on tobacco, alcohol or unhealthy foods account for a tiny fraction.



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