OECD study projects growing pressure on public health spend

Public spending on health and long-term care in Organization of Economic Cooperation and Development countries will double by 2050, if present trends continue, reaching an average level equivalent to nearly 13% of Gross Domestic Product compared with 6.7% today. Even if governments manage to contain rising costs, spending would still amount to the equivalent of around 10% of GDP by the middle of the century.

The projections are from a new OECD report that looks at the main factors driving up health care spending over the long-term. It finds that, apart from the upward pressure on costs due to the demands of older and wealthier populations, government spending on health is growing 1%-point faster than OECD countries' overall incomes. Advances in medical technology and rapid increases on health services are the main causes. Even where new technology brings down the cost of a treatment, public spending may rise as demand for the treatment increases.

It is these factors, which are not specifically related to aging populations, that will put the most pressure on health spending over the long term, the paper suggests.