Health expenditures

National dmg expenditure as a proportion of total health expenditure currently ranges from 7% to 66% worldwide. The proportion is higher in developing countries (24%-66%) than in developed countries (7%-30%). In the former, at the individual and household level, drugs represent a major out-of-pocket health care cost (1). 

In the last four to five decades national health care expenditures for all types of health-related transactions, including dental, medical, hospital, prescription, and over-the-counter (OTC) drugs, has grown from about 5% of the country s gross domestic product (GDP) (national expenditures on all goods and services) to nearly 14% of the GDP today. Total health expenditures in the United States are now well over 1 trillion annually. 

The allocation of a greater or lesser proportion of the total health expenditure to pharmaceuticals merely indicates that there are different ways of combining resources to produce health care. The superiority of one combination of resources over another can only be established by examining the aggregate results of the resources used on the health status of the population. 

Table 1.1 Public pharmaceutical expenditure as a percentage of public health expenditure...

This book consists of a series of works that evaluate various aspects related to the public financing of pharmaceuticals. In all health systems with majority public funding, the financing of pharmaceuticals constitutes one of the key factors in reform policies and health cost containment measures. This importance of pharmaceutical spending can be explained by both its relative size (its share within health expenditure as a whole), and its rapid growth, which is closely related to the constant incorporation of therapeutic innovations. 

Table 6.1 Evolution of public health expenditure in Spain (1989-2001) (%)...

Countries Health expenditure (% GDP) Pharmaceutical expenditure (% GDP) Pharmaceutical expenditure (% health spending) Pharmaceutical expenditure (S per capita)... 

Health expenditure (total or almost total) (England)... 

This chapter seeks to provide some reflections on the behaviour of health expenditure and the evolution of public health financing, with particular attention to spending on pharmaceuticals. The first part attempts to lay the foundations for a series of considerations on the effects of policies aimed at restraining public health expenditure, in particular drag expenditure. In the second part we offer the reader some reflections on what could constitute an alternative framework which would help to rationalize decision-making processes on pharmaceutical financing and spending. 

Spain undoubtedly constitutes an atypical case in the context of the European Union (EU) as regards the growth of public health expenditure within health expenditure as a whole. A cursory look at the figures reveals that the percentage of public spending within overall health expenditure remains... 

PHARMACEUTICAL EXPENDITURE WITHIN HEALTH EXPENDITURE AS A WHOLE... 

An initial reading of the evolution of pharmaceutical consumption within the Spanish Social Security system enables us to conclude, albeit in isolation and tentatively, that in per capita terms drug consumption has grown more than the nominal GDP, but that it has maintained its position within public health expenditure as a whole. Therefore, in terms of evolution, rising consumption does not represent a differential feature within the general growth in health spending. 

We consider that working towards a stable framework for the sector in Spain is one of the main challenges for the evolution of public financing of health expenditure. The necessary consensus to achieve this could be built on the discussion already formalized in parliament around a broad agreement for the pharmaceutical sector, although we are very much afraid that in the end electoral issues will outweigh what is advisable and rational. 

Table 7.2 shows the regulatory authorities in selected countries. A summary of the health system, both public and private in selected countries, is given in Appendix 9. It shows the %GDP each country spends on healthcare, per capita health expenditure, number of hospital beds, and doctors/1000 population. 

Beginning in 2005, the proportion of the US population that is eligible for Medicare benefits has begun to rise and is projected to do so for many years. (Source HCFA National Health Expenditures Projections 2000 2010. U.S. 

The effect of crowd-out of demand for private health insurance will be limited to the degree that the public subsidy is limited. Although expenditures on vaccines have risen in recent years, expenditures on vaccines remain a small part of total health expenditures. Thus, although the voucher distorts choices between spending on health insurance and other goods for some households, the magnitude of the distortion, in and of itself, is likely to be minor. 

Centers for Medicare and Medicaid Services (CMS). 2003. National Health Expenditures Projections 2002-2012. Available at www.cms.hhs.gov/statistics/nhe/ project ions2002/highlights.asp. 

Per Capita Health Expenditures by Country, 2007, www.infoplease.com/ ipa/A0934556.html, accessed 23 April 2009. 

The Centers for Medicare and Medicaid Services. National health expenditures aggregate, per capita, percent distribution, and annual percent change by source of funds calendar years 1960-00. www.hcfa.gov/stats/nhe-oact/, accessed July 12, 2002. 

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