Both private and public/statutory expenditure on health care grew substantially over the course of the 2010s across the UK, Germany, France, Italy and Spain. But public/statutory expenditure growth was both significantly higher and less volatile.
Total health care expenditure across the five countries grew by 38% in nominal (i.e. not inflation-adjusted) terms over the decade, equating to a 3.2% compound annual growth rate (CAGR). But the vast majority of this growth came from public/statutory expenditure growth, which grew by 43% (3.6% CAGR).
Private pay (covering both voluntary insurance and out-of-pocket expenditure) did also see strong, albeit substantially slower, growth over the period. Total private pay expenditure across the five countries was 18.6% higher in 2020 than in 2010 (1.7% CAGR). The total expenditure growth rate was much closer to the public/statutory expenditure growth rate because private pay expenditure accounts for a much smaller proportion of the total in all five countries.
Moreover, the growth in private pay was much more volatile. Whilst public/statutory expenditure grew every single year, private expenditure saw substantial falls in both 2013 and 2020. At one level, this should be unsurprising: private expenditure on health care is discretionary, and will therefore be more responsive to macroeconomic conditions than public/statutory expenditure.
But it’s a relatively common view amongst private health care investors that private pay is a safer option than outsourced private care, due to ideological resistance to private involvement in public health systems. This data would appear to pour a certain amount of cold water on that idea.
The data from this infographic is from the OECD’s Health Statistics 2022.We would welcome your thoughts on this story. Email your views to Martin De Benito Gellner or call 0207 183 3779.