Finnish health costs expanding in line with GDP growth

OECD countries report sharp rises in health spending

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Spending on health has gone up sharply across the board in the industrialised countries. The share of health costs in GDP was markedly higher in 2002 than five years previously, according to figures from the OECD released last week.
      In Finland, health spending has increased roughly in line with annual GDP growth. By contrast, in the United States for example, health costs grew 2.3 times as fast as gross domestic product over the same period.
     
In 2002 health expenditure accounted for an average of 8.5% of GDP in the OECD countries as a whole. Five years before, it had stood at 7.8%. During the previous five-year span from 1992-1997 there was no significant increase.
      In particular, spending has gone up on medicines. The Finnish bill for pharmaceuticals grew at an annual rate of 4.7%, while other spending on health rose by less than 1% a year.
      The ageing populations of the industrialised world require increasing amounts of care and medication. Finland and Japan are cited as two of the countries where this ageing phenomenon is most pronounced.
      At the same time, drugs have become more expensive, in part through the development in recent years of many new and costly treatments. Diagnoses and measurements have become more precise, and an increasing number of problems have been found in patients that were not previously recognised. By the same token, public expectations have risen: people now take for granted that their ailments can be treated.
     
At least in the cases of Finland, Canada, and the U.K., the increase in spending can be partly attributed to deep cuts in health budgets during the recessionary period of the early 1990s. These cutbacks were later rescinded by relaxing the budget curbs.
      Finnish health spending relative to GDP in 2002 was below the OECD average at 7.3%, only half of the 14.6% recorded in the United States. On the other hand, Finland was closer to the top of the list in terms of investment in the prevention of health problems. Here, some 3.6% of health spending was directed to preventitive medicine. Canada led the way with 7.3%.
      It is anticipated that this relatively neglected sector will expand in future as governments seek to forestall serious health problems ahead.


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