A new global study has revealed that while increased health care spending is generally linked to better public health, the benefits taper off beyond a certain point, raising questions about how efficiently wealthier nations use their health budgets.
Published in The Lancet Global Health, the study—conducted by the U.S.-based Institute for Health Metrics and Evaluation (IHME)—analyzed health spending and outcomes across 201 countries and territories from 1995 to 2022. Researchers concluded that although countries have become more effective in converting financial investments into health gains over the years, inefficiencies remain, particularly among high-income nations.
“Countries around the world have made significant progress in converting dollars into health,” the study notes. However, it also warns that with tightening health budgets, greater focus must be placed on eliminating waste and ensuring maximum returns on public investment.
The analysis assessed how much nations spend on health care relative to the number of healthy years their populations enjoy. For instance, in low-spending countries that invest around $100 (€85) per capita annually, an additional $92 (€79) could translate into one more year of healthy life. In contrast, for high-spending countries already investing $5,000 (€4,272) per capita, it would take an added $11,213 (€9,580) to achieve the same result.
The United States, which spends more per person on health care than any other nation, was cited as one of the least efficient. According to the findings, Americans lose out on 6.2 potential years of healthy life due to inefficiencies in the system. In comparison, China was ranked the most efficient country, with no measurable waste in its health spending.
European nations were generally rated as fairly efficient, though Ukraine, Lithuania, Latvia, the Netherlands, Belgium, Belarus, Finland, Norway, and the United Kingdom were noted for higher-than-average inefficiencies.
Researchers pointed to several key factors behind efficient health systems: strong governance, robust public spending, effective primary care networks, and accessible infrastructure. Countries that rely more heavily on public health funding over private services also tended to perform better.
While the study does not evaluate the quality of care, it provides a comparative framework to understand how well countries utilize their health budgets relative to others with similar spending levels.
In light of these findings, the authors urged policymakers to focus on expanding public health coverage, investing in preventive care, improving infrastructure, and strengthening democratic institutions to improve long-term health outcomes without overspending.
As global health budgets face increasing strain, the study offers a timely reminder that smarter spending—not just more spending—could be the key to a healthier future.
