The Relationship Between Health Spending And Social Spending In High-Income Countries: How Does The US Compare?

Abstract

There is broad consensus that the US spends too much on health care. One proposed driver of the high US spending is low investment in social services. We examined the relationship between health spending and social spending across high-income countries. We found that US social spending (at 16.1 percent of gross domestic product [GDP] in 2015) is slightly below the average for Organization for Economic Cooperation and Development (OECD) countries (17.0 percent of GDP) and above that average when education spending is included (US: 19.7 percent of GDP; OECD: 17.7 percent of GDP). We found that countries that spent more on social services tended to spend more on health care. Adjusting for poverty and unemployment rates and the proportion of people older than age sixty-five did not meaningfully change these associations. In addition, when we examined changes over time, we found additional evidence for a positive relationship between social and health spending: Countries with the greatest increases in social spending also had larger increases in health care spending.

Keywords: Social Spending; health system performance; healthcare spending; international comparison.