Rising health costs squeeze national budgets -OECD

* Average health spending rises to 9 pct of GDP in 2008

* Report says use of medical technology is major cost driver

* Governments will have to make "difficult choices"

By Kate Kelland, Health and Science Correspondent

LONDON, June 29 (Reuters) - Spending on healthcare in OECD countries is rising faster than economic growth, piling pressure budgets already hit by the 2008-09 recession, according to data published on Tuesday.

And healthcare costs are likely to continue rising as populations age, technology improves and public expectations grow, the Paris-based Organisation for Economic Co-operation and Development (OECD) said in a report.

"Given the urgent need to reduce their budget deficits, many OECD governments will have to make difficult choices to sustain their healthcare systems: curb the growth of public spending on health, cut spending in other areas, or raise taxes," the OECD Health Data 2010 report said.

The biggest spender on health was the United States, which spent 16 percent of its national output or $7,538 per person in 2008 -- the latest year for which full figures are available. This was well over double the $3,000 per person average of all OECD countries.

The next biggest spenders, Norway and Switzerland, spent much less than the United States per capita, but still spent around 50 percent more than the OECD average.

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For a graphic on 2008 healthcare spending in OECD countries, go to here

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Coupled with the effects of recession, rising costs have pushed health spending as a proportion of gross domestic product up to 9.0 percent in 2008 from 7.8 percent in 2000, the report said, and that trend is set to continue.

"Factors pushing health spending up -- technological change, population expectations and population ageing - will continue to drive cost higher in the future," the report said.

In Ireland, the percentage of GDP devoted to health increased to 8.7 percent in 2008 from 7.5 percent in 2007, partly due to a sharp contraction in economic output, while in Spain, it rose to 9.0 percent from 8.4 percent.

"New medical technologies are improving diagnosis and treatment but they also increase health spending," the OECD report said.

The data showed rapid growth in the supply and use of computed tomography (CT) scanners and magnetic resonance imaging (MRI) units used to diagnose illness, with the number of MRI units more than doubling on average across OECD countries to 13 machines per million population in 2008, up from 6 in 2000.

The number of CT scanners rose to 24 for every million people from 19 in 2000.

The number of MRI units per capita is much greater in Japan, the United States, Italy and Greece than in other countries, and those countries, plus Australia and Korea, also have more CT scanners.

The OECD noted that rapid growth in use of diagnostic scans over the past decade in the United States had raised concerns that some imaging may not be useful or cost-effective.

"To reduce unnecessary procedures and cut costs, many OECD countries are trying to promote rational use of costly medical technologies," the report said. (Editing by Paul Taylor)