Cross-country comparisons in health price growth over time

To examine how the United States compares in terms of health price growth relative to four other countries - Australia, Canada, France, and the Netherlands.

Secondary data on health expenditure were extracted from international and national agencies spanning the years 2000-2020.

International price indices specific to health were constructed using available international expenditure data and compared to existing health-specific national and general international price indices.

Health expenditure data were extracted from the Organization for Economic Cooperation and Development (OECD) database. We obtained a time series of health price indices from the national agencies in each of the study countries.

We find meaningful variation across countries in the rate at which health prices grow relative to general prices. The United States had the highest cumulative health price growth compared to general price growth over the years 2000-2020 at 14%, followed by Canada and the Netherlands. Unlike the other study countries, health prices in France grew consistently in line with general prices. Price growth for health care paid for by public funds and households grew at different rates across countries, where price growth was higher for public payers. US households faced the greatest mean annual price growth.

The choice of price index has major implications for comparative analysis. Despite their widespread use internationally, general price indices likely underestimate the contribution of price growth to overall health expenditure growth. We find that in addition to its reputation for having high health price levels compared to other high-income countries, the United States also faces health price growth for goods and services paid for by government and households in excess of general price growth. Furthermore, US households are exposed to greater health price growth than households in comparator countries.