EU Health Care Financing by Government & Compulsory Schemes

Key Takeaways

• Germany has the highest government and compulsory contributory health care financing in the EU at 10.01% of GDP. Almost all of that comes through compulsory contributory health insurance schemes, not direct government spending.
• Sweden and Denmark finance public healthcare entirely through government schemes.
• The EU average for government and compulsory contributory health care financing stands at 8.03% of GDP. 21 of 27 member states fall below this figure.
• Latvia records the lowest government and compulsory contributory financing in the EU at 4.32% of GDP. Romania follows at 4.39%.
• The gap between Germany and Latvia traces to economic scale, not financing scheme type. Lower tax revenue and wages cap what smaller economies can commit to public healthcare.
• EU Countries Ranked by Government and Compulsory Contributory Health Care Financing

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Learn something new about Germany every week and make informed decisions with confidence.

Stay tuned!

Learn something new about Germany every week and make informed decisions with confidence.

Germany spends more on public healthcare than any other EU country. Its government schemes and compulsory contributory financing reach 10.01% of GDP in 2023. France and Sweden follow at 9.71%. The EU average stands at 8.03%.

That average covers two fundamentally different health care financing schemes.

Germany and Sweden Finance Healthcare Through Different Financing Schemes

In Germany, healthcare financing runs primarily through the Gesetzliche Krankenversicherung (GKV). The GKV is a compulsory contributory health insurance scheme in which employers and employees each contribute a share of monthly premiums into public health funds. Of Germany’s 10.01% of GDP in government and compulsory contributory financing, 9.09 percentage points come from compulsory contributory health insurance. Government schemes account for 0.92 percentage points.

France follows the same pattern. Of its 9.71%, 9.20 percentage points come from compulsory contributory health insurance. Government schemes account for 0.51 percentage points. 

Compulsory contributory health insurance traces to Otto von Bismarck’s health insurance law of 1883. It is the oldest social insurance system in the world. Countries that adopted this scheme collect healthcare revenue through payroll contributions rather than general taxation.

Sweden and Denmark take the opposite approach. Sweden’s 9.71% of GDP comes entirely from government schemes funded by general taxation. Denmark’s 7.97% does too.

Latvia, Romania, and Hungary Record the Lowest Government and Compulsory Contributory Financing in the EU

21 of 27 EU member states fall below the EU average of 8.03%. Latvia records 4.32%. It is the lowest in the EU. Romania follows at 4.39%. 

The percentage gap understates the actual difference. Public healthcare spending in Central and Eastern Europe averages €1,618 per capita in 2023. In the four largest EU economies, the average reaches €3,221 per capita.

Two factors explain why these countries record the lowest financing in the EU.

The first is economic scale. A country that commits a comparable share of GDP to healthcare but starts from a smaller economy produces far less in absolute spending per person.

GDP of European Countries ->

Healthcare worker emigration is the second. As of 2025, 40% of Romania’s physicians had emigrated since the country joined the EU in 2007. Bulgaria, Hungary, and the Baltic states face the same pattern. In 2023, wage differences of two to three times between domestic and Western EU salaries pulled healthcare workers out of the system.

The gap between Germany’s 10.01% and Latvia’s 4.32% traces to economic scale, not scheme type. A smaller economy produces less tax revenue and lower wages. Both cap what a country can realistically spend on public healthcare.