Sunday, April 10, 2011

Health care spending in the US

Number of the Week: U.S. Spends 141% More on Health Care - Real Time Economics - WSJ
A new report finds that the U.S. spends far more on health care than any of the other 29 OECD nations, and gets less health for its money. Annual public and private health-care spending in the U.S. stands at $7,538 per person, 2.41 times the OECD average and 51% more than the second-biggest spender, Norway. Meanwhile, average U.S. life expectancy is 77.9 years, less than the OECD average of 79.4.
A few thoughts on this:

1.  $7,500 per person really doesn't strike me as an excessive amount of money for the richest nation in history to spend on health care every year.  As other essential items like food and shelter fall as a percentage of our income, we will naturally spend more on other things, like health care.

2.  Having said that, knowing how much we spend is only half of the matter.  The other, much more difficult, part is whether or not we are getting our money's worth.  This goes for any type of spending, not just health care.  If you are reading this in Wisconsin, please keep this in mind as we discuss the Governor's proposed cuts to education spending.

3.  This article suggests that we are not getting our money's worth since life expectancy is actually less in the US than in the other OECD countries.  This is a useful data point, to be sure, but it hardly seems definitive. There may be a other (cultural, historical) reasons why those countries have a higher life expectancy.  Perhaps is we lowered spending the life expectancy gap would be even wider.  In that case would anyone argue we needed to "control health care costs?"

1 comment:

Dad29 said...

And as usual, it will be VERY interesting to read how "life expectancies" were calculated.

IIRC, last time around, some countries didn't bother counting infant deaths--and of course, a lot of countries do not have the drug-gang-death problems we have here.