Public spending on health is a cornerstone of national welfare policies, and in 2023, it accounted for a significant share of European government budgets. According to Eurostat data, EU countries collectively allocated €1,251 billion to health, amounting to 7.3% of GDP.
Health remained the second largest area of government expenditure after social protection. Using the international Classification of the Functions of Government (COFOG), this spending is divided into specific categories, revealing the different ways countries structure their health systems. The data shows not only how much governments are investing, but also where priorities lie—whether in hospitals, outpatient care, medical products or public health. The disparities between countries underline the uneven landscape of public health provision in the European Union.
National Disparities and Spending Profiles
There is considerable variation in the share of GDP devoted to health among European nations. Austria reported the highest proportion at 9.1%, followed closely by Czechia and France at 8.9%, and Denmark at 8.2%. In contrast, Hungary (4.1%), Romania (4.7%) and Malta (5.1%) recorded the lowest figures. The EU average stood at 7.27%, while the euro area average was slightly higher at 7.40%. These differences are not only numerical but structural, reflecting diverse healthcare models and national priorities.
Hospital services absorbed the largest portion of health expenditure in most countries. For instance, Denmark devoted 5.52% of GDP to hospital services, far above the EU average of 3.17%. Estonia (4.84%) and Czechia (4.19%) also stood out for their focus on hospitals. Germany, on the other hand, allocated a significant share to medical products, at 1.69% of GDP, compared to the EU average of 1.11%. Czechia also dedicated more than double the average share to public health services, at 1.87%, against the EU figure of just 0.26%.
These patterns point to strategic choices. Countries like Denmark and Estonia are heavily investing in hospital infrastructure, whereas Germany places more weight on pharmaceuticals and medical devices. In some cases, low spending may reflect reliance on private provision, but in others, it may indicate limited public investment in health.
Spending Structure and Evolution Over Time
Looking at how this spending is structured offers further insight. In 2023, just over half (53.1%) of all public health expenditure in the EU came in the form of social cash benefits and social transfers in kind. This includes publicly funded access to services and goods such as medication, delivered through market-based production. Employee compensation, which covers salaries and social contributions, accounted for 23.1%, while intermediate consumption—spending on goods and services used in the delivery of healthcare—made up 16.8%. Capital investments, such as hospital construction or equipment purchases, represented a relatively small share at 3.4%.
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This distribution reflects a system still geared more towards operational delivery than long-term investment. The modest capital spending share may pose challenges for infrastructure renewal. The heavy reliance on market production also suggests that public systems continue to integrate private sector provision extensively.
Over the past three decades, government health expenditure in the EU has grown steadily. In 1995, health accounted for 5.9% of GDP and 11.1% of total government spending. By 2023, these figures had risen to 7.3% and 14.8% respectively. The years 2021 and 2022 saw peaks of 8.0% and 7.6% of GDP due to the COVID-19 pandemic, underlining the pressure public health emergencies can place on government budgets. While the share of GDP allocated to health declined slightly in 2023, the long-term trend remains upward, reflecting both increasing health demands and growing public commitment to funding them.
Classifications and Reporting Frameworks
Eurostat collects these figures within the framework of the European System of Accounts (ESA 2010), using the COFOG classification. For health, spending is broken into six groups: medical products, outpatient services, hospital services, public health services, research and development (R&D), and health expenditure not elsewhere classified. In 2023, the EU average allocations as a share of GDP were as follows: outpatient services (2.31%), hospital services (3.17%), medical products (1.11%), public health (0.26%), R&D (0.16%), and health n.e.c. (any health-related government spending that cannot be attributed to these defined categories; 0.28%).
The relative underfunding of R&D and public health is particularly noteworthy. Most countries allocated less than 0.2% of GDP to R&D in health. Denmark stood out slightly with 0.17%, while Czechia invested 0.07%. Some countries, such as Bulgaria and Ireland, did not report any R&D spending at all. Public health services were similarly underrepresented, with many countries dedicating less than 0.2% of GDP.
This limited funding suggests a reactive rather than preventive approach to healthcare. While hospital and outpatient services are essential, underinvestment in R&D and public health could weaken systems’ ability to respond to emerging health challenges or innovate in care delivery. Given the impact of recent global health events, the figures may prompt reflection on how governments plan and prepare for future needs.
Government health expenditure across the EU reveals a landscape of growing but uneven investment. While countries such as Austria, France and Czechia lead in overall spending, others remain well below the EU average. The structure of this spending—focused largely on hospital care and social transfers—raises questions about long-term system sustainability, especially given the limited funding for infrastructure, R&D and public health.
Eurostat’s detailed breakdown provides an essential tool for monitoring how health systems are financed and where resources are allocated. It also highlights the ongoing challenge of achieving balance: between present needs and future readiness, between service provision and innovation, and between equity and efficiency. As demographic pressures and global health risks intensify, a strategic approach to health spending will be essential for building resilient, inclusive healthcare systems across Europe.
Source: Eurostat
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