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Healthcare Spending

Whether government- or privately funded, it's important to know how a healthcare system's budget is split up in order to track and possibly reduce costs, or funnel more money into needy areas. Naturally, the proportions of budget allocated to different departments of healthcare will depend from country to country and often between regions within those countries as well. However, there are trends that make it possible to outline the basic concerns in healthcare spending and compare how these concerns are met or aggravated across different countries. 

The major components of a healthcare budget that must be addressed and funded are:

  • hospitals (including emergency services)
  • dentists
  • physicians
  • optometrists
  • health promotion
  • administration costs
  • drugs/pharmaceuticals 

Many of these share requirements such as research, equipment maintenance, personnel salaries, building costs, medical supplies and distribution, but some have additional concerns as well. For example, hospitals must allow patients to stay for long periods of time and so require catering and heavier cleaning funding factored into their budgeting.

To give an idea of what is most expensive, Canada spent a total of $221 billion on healthcare in 2014. The biggest contributing factors to that were hospitals, which took up 30% of the budget ($62.6 billion), drugs, which needed a further 16% ($34.5 billion) and physicians which claimed 15% ($31.4 billion)1

Another important issue in healthcare spending is public and private sectors. Many western countries have around a 70-30% ratio of government-funded to privately funded, with the notable exception of the USA where more than 50% of healthcare was done by the private sector in 20131. In America, there is no blanket government-funded healthcare at the time of writing, which makes the 'Obamacare' proposals a hot political topic. As it is, the government only provides healthcare for children, disabled people, veterans and the elderly. Everyone else must get insurance through their employer or independently and, as not everyone is employed or able to afford that, more than one in ten Americans2 must simply put up with their ailments or attempt to receive uncompensated (charity) care. Of course, America is not the only country with this kind of problem, but they may be the most prolific case today. 

Perhaps coincidentally, Americans pay the most for their healthcare out of the 34 member countries of the Organisation for Economical Co-operation and Development, according to the OECD's 2011 survey3. 17% of their GDP goes into healthcare, with the next highest being the Netherlands at 11.9%. No healthcare system is perfect, and since it is literally a matter of life and death, debates regarding healthcare budgets can be quite heated. At the present, it seems more eastern European countries have the best model of government-funded healthcare however, with Norway, Denmark, Sweden,  the Netherlands, and Austria and Germany consistently coming out near the top of impartial evaluations.



1.  (2013). Health spending in Canada 2013. [ONLINE] Available at: [Last Accessed 12/5/2014].

2. Chambers, F. (2014). Number of Americans without health insurance falls to record low - but more than one in 10 still don't have it. [ONLINE] Available at: [Last Accessed 12/5/2014].

3. OECD Health Division (November 21, 2013). "OECD Health Data 2013 - Frequently Requested Data". Paris:OECD. Retrieved 2014-01-21. 

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