7 Countries With the Highest Health Care Costs

"Price is what you pay. Value is what you get." These words spoken by Warren Buffett come to mind when looking at how much people across the world pay for health care.

Are the nations that pay much more for health care than others also getting commensurately more value? Let's look at the seven countries with the highest health care costs among the 34 member nations of the Organisation for Economic Co-operation and Development, or OECD.

7. Denmark
Danes pay greatly for health care when compared to other countries. Denmark spends 11.1% of the country's GDP on health care, or around $4,464 per person. However, the country's life expectancy is 79.3 years, below the OECD average of 79.8.

6. Switzerland
The Alps aren't the only things reaching lofty heights in Switzerland. The nation spends 11.4% of its GDP on health care, high enough to claim the No. 6 spot on our list. Switzerland's per capita spending of $5,270 ranks third-highest among all OECD countries. The Swiss might be getting a good return on this spending, though. The nation's life expectancy of 82.6 ranks as the second-highest of all OECD nations after Japan.

5. Canada
Canada stands as the second-largest country in the world in terms of geographical area, but it also has relatively large health care costs. Canadians spend 11.4% of GDP on health care. The country's $4,445 per capita in medical spending ranks seventh-highest among OECD nations. Canadians have a life expectancy of 80.8 years, one year more than the OECD average.

4. Germany
Germany is Europe's greatest economic powerhouse, with a sizable portion of that economic power directed toward health care. German spending on health care comprises 11.6% of its GDP and totals $4,338 per person. The German life expectancy of 80.5 years exceeds the OECD average but only ranks 20th among the 34 OECD member nations.

3. France
France also spends 11.6% of its GDP on health care, but edges Germany in our ranking. French medical-related spending amounts to $3,974 per person. On the positive side, though, France boasts the ninth-highest life expectancy in the OECD at 81.3 years.

2. Netherlands
Healthcare isn't exactly a Dutch treat. The Netherlands spends 12% of its GDP -- $5,056 per capita -- on medical costs. The country ties Canada for 13th place among OECD members with a life expectancy of 80.8 years.

1. United States
As you probably expected, Americans are No. 1 -- unfortunately, in an area where we'd prefer to rank lower. The U.S. spends a staggering 17.9% of its GDP on health care. That's $8,680 per person -- 61% higher than the next-highest nation. However, Americans' life expectancy of 78.7 years places 27th among OECD members and is over a year less than the OECD average.

Observations
Digging into some of the details behind these numbers yields some interesting information. There are some areas where the U.S. fares much better than most other countries. Americans' cancer survival rates rank among the best in the world. The U.S. also has significantly lower waiting times than other nations for receiving certain types of care, including elective surgeries.

The U.S. has the sixth-lowest average hospital stay length and the seventh-lowest number of hospital beds per 1,000 people. This either means that American hospitals are more efficient than most of the world -- or they push patients out the door more quickly one way or the other.

There are far fewer physicians per 1,000 people in the U.S. than most other countries. The U.S. ties for seventh-lowest among OECD member nations, with 2.4 physicians per 1,000 persons. However, even with fewer physicians, more CT and MRI exams are performed in the U.S. than nearly any other country. This likely results from multiple factors, including fear of lawsuits and financial incentives within the U.S. health care system.

The U.S. is by far the most obese nation among OECD nations. More than 28% of American reported being obese compared with the OECD average of 15%. The next most obese country was Australia with an obesity rate of 21.3%.

Two findings struck me as most intriguing. First, Americans ranked first among all OECD countries in how healthy they think they are with 89.8% reporting perceived good health. Our life expectancy isn't high relatively speaking, but we think we're in good shape health-wise.

Second, although our health care costs are by far the highest, the growth rate doesn't look nearly as bad comparatively. U.S. health care costs grew by 4.2% annually between 2000 and 2010, while the average growth rate for all OECD nations was 4.3%.

Investing takeaway
The Motley Fool always looks for an investing angle, so what's the takeaway from all this health care cost information? I think it makes sense for investors to look at the big picture. The U.S. spends way too much on health care. Companies that help control those costs should have significant growth opportunities over the long run.

Pharmacy benefit managers, or PBMs, fit the bill nicely. Average spending on prescription drugs in the U.S. last year was $898 per person. Prescription drugs rank as the third-highest cost of health care, trailing only hospital care and physician/clinical services.

Several PBMs look attractive, but I particularly like Express Scripts (NASDAQ: ESRX  ) . The company ranks as the largest PBM in the nation. Its scale and analytical capabilities give it a competitive edge, in my view, for helping organizations control prescription drug spending.

The stock trades currently at a forward price-to-earnings multiple of 12.5. That's not bad at all considering the company's solid growth prospects. After all, price is only what you pay. Value is what you actually get.

In 2011, a massive shift began. With the first of the baby-boomer generation reaching Medicare age, America's health care landscape was forever changed. Combine the aging population with the impact of Obamacare, and the need for innovative solutions for skyrocketing health care costs is as clear as ever. Express Scripts is part of that solution, and in this brand new premium report on the company, we clearly lay out the opportunity in front of this misunderstood stock. Claim your copy by clicking here now.


Read/Post Comments (11) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 15, 2013, at 3:55 PM, emailnodata wrote:

    LOL, it's typical.

    America puffs its chest and THINKS it's always the best at everything...when we are rarely the best at anything.

    Our healthcare system is a wreck because we tie healthcare to employment...where it does NOT belong. Healthcare is a social function, not an employer function. Same goes for retirement.

  • Report this Comment On June 15, 2013, at 4:48 PM, mike28584 wrote:

    emaillnodate, If it so bad here why do you stay. I get tired of hearing people like you bitching about the United States of American. There is somethings wrong in this country, but it still the best place in the world to live. Again if you are so unhappy here there are boats and planes leaving here every day hop on one.

  • Report this Comment On June 15, 2013, at 5:48 PM, Germanlady wrote:

    To Mike28584 -

    Sorry you can't accept that the USA is not number one in any area. However, for now at least, we do have freedom of speech to agree or disagree with what others, to include the government, may or may not say and remain a US citizen, even though that doesn't count for much now a days. With our constant warring, illegals taking president over citizens, and our gouging of oil costs, it isn't hard to understand why a lot of American citizens are leaving the country to live abroad, but your head is so far in the sand, you don't even realize that some Americans are actually living the US for better lives outside the US.

  • Report this Comment On June 15, 2013, at 6:29 PM, Easttexas9 wrote:

    Identifying areas that can be improved is the American way. Resting on one's laurels and myopic navel gazing should not be.

  • Report this Comment On June 15, 2013, at 6:32 PM, mike444673 wrote:

    There is no country in recorded history with socialized medicine, that can hold a candle to the quality of healthcare we have in the US. The reasons it is so expensive are very simple to understand. Insurance is a big one. Doctors, surgeons and anyone practicing has to pay huge malpractice insurance and that is passed on to the patient. Drug companies are also making as much as they can as well as lawyers who represent frivolous lawsuits. Take a look in any ER room at any hospital at 3am, it is packed. Free births, tubalizations, free healthcare, on and on because nobody can be turned away. Hundreds of thousands each night from each hospital multiplied by thousands of hospitals. Socialized medicine will do nothing to help this problem because the people who it was designed to help, will suffer the most because now, they can't afford it. Private practice doctors are being forced out because socialized medicine is Government controlled, not doctor or patient controlled meaning, good luck on elective surgery's. Say goodbye to the best healthcare in the entire world, the envy of all other countries and embrace the change.

  • Report this Comment On June 15, 2013, at 7:01 PM, SerenityUK wrote:

    Healthcare is a business in the States. Any time an ambulance is called and/or you go to the ER, there is a fee. Even the meds they give you, a simple aspirin will cost you more than if you would have went to Walgreens. It cost $500 dollars for my grandmother to be taken to a hospital that was less than 5 minutes away and she had insurance. My best friend had a severe panic attack, wasn't even there 12 hours, but it cost her over $800. It took her ages to pay that off. I can understand if you're getting tests done and spending overnight or days in a hospital it's going to be costly, but a few hours and a little medicine then sent on you merry way with a bill that cost more than your monthly rent or mortgage is ridiculous.

  • Report this Comment On June 15, 2013, at 7:15 PM, youngesquire wrote:

    To Mike28584:

    I would suggest you read, "The Healing of America" by T.R. Reid to get your facts straight about American health care, particularly compared to the other industrialized countries.

    Also, before you invite me to leave the U.S. for being critical, I would remind you that I didn't rely on an invitation from you to be born here nor to serve my country in the U.S. Army.

    I believe that capitalism is the main fault of our poor health care system and will be the downfall of this country, along with higher education, oil/gas industry, and government contractors to name a few. All of the industries I have named are driven by making money at the expense of everything else. We can learn plenty from so-called 'socialized' countries or countries that consider good health care a right of its citizens.

  • Report this Comment On June 15, 2013, at 8:21 PM, Gary789 wrote:

    I live abroad with my family, running businesses around the world. I pay for my own health care through the largest health care companies in the world, such as Alianz, Chubb, et al. My family and I are covered through these large, top-rate, global health care insurance companies in every country in the world except one ... yep, you guessed it - the USA! These providers told me their companies simply do not have any interest in getting caught up in a system that is so inefficient, greedy, complicated and expensive. So, we pay cash in the US for any doctor visit...and the doctors ALWAYS give us a 20% to 50% discount for the cash payment, citing that they are happy to pass along some of the savings and additional earnings to clients that pay cash. Now, tell me... is the US system jacked up or not?

  • Report this Comment On June 15, 2013, at 11:11 PM, bugmenot wrote:

    The US has been screwed by incompetent government. If we deport all Democrats, we may survive.

  • Report this Comment On June 16, 2013, at 4:42 AM, VintageV12 wrote:

    This complete BS. EVERY country with a national, or universal, healthcare plan pays at most 75% of us. Some pay half. And they all have better results, happier people, and a better society and culture. My country is a disgrace.

  • Report this Comment On June 16, 2013, at 11:20 AM, garipac wrote:

    Concerning European med costs: The Scandinavian countries and probably most of the rest provide complete dental care (not the US). Also, congress has exempted medical care and insurance from antitrust regulation, which explains the outrageous billing and charges, most of which is paid by insurance, but ultimately by the consumer. Many of the so-called costs in the US are for things like "restless leg syndrome". The cure is five minutes of rigorous leg exercises per day. Acid reflux disease is a fake as well. If your food makes you sick, try changing your diet. Don't put food in your stomach that makes you sick (digestion is a 24 hour process and includes wine and other non- food items.) Wine is acidic(it's called ACID REFLUX, folks). The treatment for this fake syndrome is at least $10k/yr. The same with "restless leg syndrome". Diabetes should be called married couples disease (if you criticize your wife's cooking , you won't be married long). If it is making you fat, it's killing you. It doesn't matter that it tastes good. Salt, wine and other gastric stimulants cause you to eat more than you would otherwise eat. If you are gaining weight, now you know why. As a general rule it can be said that women don't know how to cook. If your partner is gaining weight, that is the proof. God help the babies! They are not supposed to be fed cow's milk until they are 3 yrs old, also eggs. They have a 6 hr digestive cycle. They can't digest it properly in that time period. This is the smoking gun for allergies (asthma is a food allergy) that are running rampant today. Basically, none of this stuff is cheap and it is all waste. One good investment would be mandatory scratch testing at birth and at 3years old, but still no milk or eggs until age 3. After this, test every 3 or 4 years and follow the results. 9% are gluten sensitive; no wheat, barley or rye for these people. The Euros are also trying regulate into nonexistence cures based on vitamins other nutritional elements, which are the new cutting edge and a lot cheaper and still legal in the US. In general the problem is oligopolistic food and drug policies, including advertizing in mass media and FDA policies (Big Food, Big Pharma, Big Media and Big Gov). That's all, folks and thanks for letting me get it off my chest.

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