Health care in the US is more expensive, by far, than anywhere else on this planet. It represents greater than 17.9% of the US GDP. Health spending is projected to grow 1.0 percentage point faster than Gross Domestic Product (GDP) per year over the 2017-26 period; as a result, the health share of GDP is expected to rise from 17.9 percent in 2016 to 19.7 percent by 2026. Other comparable developed countries pay much less:
The question is why are we so wasteful and what do we get for all this money. If you look at longevity as the overall measure of success for healthcare, we are not doing very well, as described in a recent article in the NY Times:
The above graph shows life expectancy over time compared to similar developed nations.
This shows life expectancy as a function of health spending per person.
So what are the proposed causes for this dramatic inefficiency? The authors propose many factors to explain the sudden up tick in health care spending around 1980. For example:
“suppliers marketed very costly technological innovations with gusto,”and they “found ready customers in hospitals, medical practices and other entities eager to keep up with rivals in the medical arms race.” The last third of the 20th century or so, was a fertile time for expensive health care innovation: Coronary artery bypass grafting, innovative drug treatments for H.I.V. for cancer and expensive NICU care for premature babies.
But innovation does not necessarily translate in to better outcomes. Almost no matter how it’s measured, longevity in the United States has not kept pace with that of other nations.
Another study, published in JAMA, found that even accounting for motor vehicle traffic crashes, firearm-related injuries and drug poisonings, the United States has higher mortality rates than comparably wealthy countries.
So here is the presumed bottom line.
“The lack of universal health coverage and less safety net support for low-income populations could have something to do with it. The most efficient way to improve population health is to focus on those at the bottom,” says Ms Glied from Columbia Univ. “But we don’t do as much for them as other countries.”
The effectiveness of focusing on low-income populations is evident from large expansions of public health insurance for pregnant women and children in the 1980s. There were large reductions in child mortality associated with these expansions. “Those reductions were much larger for poor children than for richer children,” Ms. Currie said.
In 1980 the United States spent 11 percent of its G.D.P. on social programs, excluding health care, while members of the European Union spent an average of about 15 percent. In 2011 the gap had widened to 16 percent versus 22 percent.
Slow income growth could play a role because poorer health is associated with lower incomes. “It’s notable that, apart from the richest Americans, income growth stagnated starting in the late 1970s,” Cutler said. “Social underfunding probably has more long-term implications than underinvestment in medical care.”
Read more here about how social programs can lead to increased longevity: Are better health outcomes related to social expenditure?
It has been known for some time that low income/wealth is associated with much decreased longevity:
- as the income gap increases in the US, so does the disparity in life spans between rich and poor as reported in the NY Times
- in the U.S., the richest 1 percent of men lives 14.6 years longer on average than the poorest 1 percent of men, while among women in those wealth percentiles, the difference is 10.1 years on average.
- This eye-opening gap is also growing rapidly: Over roughly the last 15 years, life expectancy increased by 2.34 years for men and 2.91 years for women who are among the top 5 percent of income earners in America, but by just 0.32 and 0.04 years for men and women in the bottom 5 percent of the income tables.
- U.S. tax and spending policy does relatively little, compared with its peers in the developed world, to reduce inequality and with the new tax policies enacted by our current government this will worsen.
In the NY Times (2014) Leonhardt and Quealy note that “The American Middle Class Is No Longer the World’s Richest”. The following interactive graph shows who many developped countries like Norway, Canada, Germany, Sweden, Netherlands are making gains for the lower 20th percentile of wage earners surpassing American incomes for this bracket. American incomes are losing their edge, except at the top:
It is this same bracket (the lower 20th percentile) that have such poor life expectancy dragging down the overall life expectancy for the entire country.
Finally, this study shows an interesting shift: since about 2004 the lowest quintile income group in the US is spending much less on healthcare on a per capita basis, than the highest income quintile. One of the authors remarks that “co-payments and deductibles have bent the cost curve. But it’s come at the expense of poor people and middle-income people.”
My conclusions:
- efforts by the GOP to slash medicare will make things worse
- the new tax law will make things worse by aggravating income disparity
- advances in medicine benefit the health care industry and affluent Americans who have access to the newest treatments, but on average the population does not benefit as measured by life expectancy, for example.
- How you vote may be a matter of life or death.