Across Asia-Pacific countries, per capita health spending continues to rise. Low and lower-middle income countries reported an increase from 173 to 247 international dollars (in constant 2017 USD PPP) between 2010 and 2017, whereas upper middle and high income countries spending grew from 466 to 689 and from 2 922 to 3 712 international dollars (in constant 2017 USD PPP) during the same period, respectively. However, large inequalities in per capita health care spending can be observed in Asia-Pacific countries in 2017 (Figure 6.1), ranging from only 94 international dollars (USD PPP) in Bangladesh to 4 816 international dollars (USD PPP) in Australia. The average OECD current health spending per capita in 2017 was around 16 times that of the low income countries in Asia-Pacific (3 996 versus USD PPP 247).
The health care sector continues to expand faster than the economy in Asia-Pacific. On average, between 2010 and 2017, the growth rate in per capita health spending in real terms was 4.7% per year, higher than the 3.6% observed for gross domestic product (GDP) (Figure 6.2). For both, health spending and overall economic activity, growth in China was even more rapid – more than twice the average rate for the region. Brunei Darussalam and Solomon Islands reported a decrease in per capita health spending in real terms between 2010 and 2017. Health spending growth in many Asia-Pacific countries has exceeded economic growth over the past seven years, resulting in an increasing share of the economy devoted to health. All countries below the diagonal line in Figure 6.2 report that health expenditure has grown faster than income. This means that the share of health care expenditure in total expenditure has continued to increase. In all countries above the line, the increase in health spending – on average – was lower than the increase in GDP. Hence, the share of health spending in total spending declined.
How much countries spend on health care over time can be ascribed to overall health spending growth and economic performance. Health expenditure accounted for 4% and 7% of GDP in low and middle income, and high income Asia-Pacific countries respectively in 2017, an increase of 0.3 and 0.8 percentage points compared to 2010. This indicator varied from 2.3% in Bangladesh and Brunei Darussalam to up to 10.8% in Japan (Figure 6.3). Generally, the richer a country is, the greater the share of their income devoted to health care. The percentage of GDP spent on health across OECD countries is – on average – twice that of the Asia-Pacific low and middle income countries (8.7% versus 4%). Between 2010 and 2017, the share of health in relation to GDP declined by more than 2 percentage points in Solomon Islands, whereas it increased in Myanmar, Singapore, the Republic of Korea and Japan1 by more than one percentage point (Figure 6.3).
Although health systems remain a highly labour-intensive sector, capital has been an increasingly important factor of production of health services over recent decades, as reflected for example by the growing importance of diagnostic and therapeutic equipment or the expansion of information and communications technology (ICT) in health care. Capital investments in health tend to fluctuate more with economic cycles than current spending on health care. However, slowing down investments in health infrastructure and equipment will affect service delivery. As a proportion of GDP, Japan was the highest spender on capital investment in 2017 with more than 1% of its GDP going on construction, equipment and technology in the health and social sector (Figure 6.4). However, capital spending can be significantly lower. On average, it represented 0.3% of GDP across reporting non-OECD Asia-Pacific countries, and accounted for 0.1% or less in Bangladesh and Cambodia in 2017.
