U.S. healthcare spending far outpaces other high-income countries, but social spending is not far off, just slightly below average, according to a new study published in Health Affairs. The findings may come as a surprise to some who believe U.S. healthcare spending is so high in part due to lower spending on social services that can impact social determinants of health.
The U.S. spent 16.1% of GDP in 2015 on social spending––defined as spending on social programs––just below the 17% average for Organization for Economic Cooperation and Development (OECD) countries, according to the study, which was conducted by researchers from the London School of Economics and Harvard T.H. Chan School of Public Health.
When education spending was included, the U.S. spent more––19.7% of GDP compared to 17.7% for OECD countries. In addition, social spending has grown at a faster rate in the U.S. than elsewhere.
“While the US is an outlier in terms of health care spending, its social spending is very close to the OECD average,” wrote first study author Irene Papanicolas, associate professor of health economics in the department of health policy at the London School of Economics and Political Science, et al. “Thus, it appears that high health care spending may be what drives the low ratio between the two types of spending in the U.S.”
However, the U.S., despite being on par with other countries for social spending, has a lower average life expectancy. OECD countries had an average life expectancy of 80.6 years compared to 78.8 years in the U.S.
Average social spending per capita among OECD countries was $7,308, compared to $9,018 per capita in the U.S. OECD countries varied in their social spending, however, with Mexico being the lowest spending, about $839 per capita, and Denmark as the highest, with $12,922 per capita.
Over time, researchers found that those countries that spent more on social spending also spent more on healthcare––another important distinction that social spending and healthcare spending may have similar objectives.
“These findings should not be interpreted as suggesting that social spending might not be effective at lowering health care costs for subpopulations, such as frail elderly or homeless people,” the researchers wrote.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."