Exploring The Relationship Between Social And Medical Service Spending

The recent Health Affairs article by Irene Papanicolas and colleagues entitled “The Relationship Between Health Spending And Social Spending In High-Income Countries: How Does The US Compare?” provides new and important data on the relationship between international spending on medical and social services.

The article’s primary finding of a positive relationship between health spending and social service spending is perhaps unexpected. Based on data from the Organization for Economic Cooperation and Development (OECD), the study challenges the conventional wisdom that countries that spend more on social services would spend less on medical care because social services can substitute for medical services in some instances.

In examining the policy implications of this study, it is important to note that international comparisons can have different results from cross-sectional, domestic comparisons. For example, countries with higher average incomes traditionally spend a higher percentage of their gross domestic product (GDP) on health care, but individuals with higher incomes typically spend a lower percentage of their incomes on health care.