Which countries have the most cost-effective healthcare?

Jasmine Rodriguez, 10, gets an influenza vaccine at Boston Children’s Hospital in Boston, Massachusetts January 10, 2013.

More for less ... which countries are getting their healthcare economics right? Image: REUTERS/Brian Snyder

Rosamond Hutt
Senior Writer, Formative Content
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Healthcare consumes a large chunk of national budgets all over the world, but which countries are getting the best value for money?

 Cost of healthcare: percentage of GDP compared with life expectancy 2013

Norway, Switzerland and the United States are the world’s three biggest healthcare spenders – paying $9,715 per person (9.6% of GDP), $9,276 per person (11.5% of GDP), and $9,146 per person (17.1% of GDP) respectively.

But other countries’ health systems are managing to achieve similar or better results for far less. Hong Kong spends $1,716 per person (6% of GDP), Israel $2,599 per person (7.2% of GDP) and Singapore $2,507 (4.6% of GDP). These countries, like Norway and Switzerland, have life expectancies of between 82 and 83 years. By comparison, life expectancy in the US is 79.

 Total expenditure on healthcare as a percentage of GDP
Image: OECD

How do they do it?

While factors like diet and active lifestyles do play a part, the way different healthcare systems are set up also has a major influence, according to Mark Britnell, chairman and senior partner for the Global Health Practice at KPMG. This helps to explain why we see such variation in the outcomes of patients who undergo certain treatments in different countries.

In an article written ahead of the World Economic Forum’s Davos meeting, Britnell, who has worked in 60 countries’ health systems over the past six years and is a member of the Forum’s Global Agenda Council on the Future of the Health Sector, reveals some of the things most likely to produce “more health for less cost”.

What does an efficient health system have?

- A strong primary care system. “Nowhere is this better evidenced than Israel, which has made easy access to family physicians in the community a cornerstone of its services,” writes Britnell. “This is then ingeniously aligned by having the same four health maintenance organizations pay for and provide all types of healthcare – so there are strong incentives to keep patients well and at home, rather than create ever larger hospitals.”

- Technology to contain costs. This “speeds up activity, increases accuracy and allows for the kinds of big data analysis that can actually predict which patients are most likely to need follow-up care. Singapore is years ahead of most other countries in this regard – in an international comparison of technological ‘connectedness’ in healthcare, it scored top on every indicator.”

What about the least cost-effective health systems?

Countries that have high healthcare spending with underwhelming health usually have one thing in common, according to Britnell.

“The shared feature of systems like these is that resources are misallocated – either to a particular section of society (leaving another section without) or to particular kinds of service (usually hospitals) sucking up the funding that would be better spent elsewhere.”

Examples include South Africa, which spends 8.9% of its GDP on healthcare and where life expectancy is 56.7 years; Russia (6.5% for 71 years) and the US (17.2% for 79).

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