Health Care Spending

You probably know that the US spends more of its GDP on health care than any other OECD nation (for better outcomes).

Yet every major country spends very significantly less of its national output on health than we do. As Table 1 shows, we spend five percent of GDP more than the country with the second-highest level of health spending as a share of GDP. Five percent of GDP is about $700 billion that Americans could be spending on new homes, cars and clothing, nice restaurants, paying off bills or anything else they can imagine. Instead, that money went to doctors, hospitals, pharmacists and insurance companies. If we only spent as much as Japan—a country known for having an excellent health system and a healthy population—we would have eight percent of GDP, about $1 trillion, to spend on anything we like.

Country Percent
U.S. 16.0
France 11.0
Germany 10.4
Belgium 10.2
Canada 10.1
Portugal 9.9
OECD Average 8.9
U.K. 8.4

But did you know that government spending on health care is also higher most other countries too?

Country Percent
France 8.7
Germany 8.0
U.S. 7.3
U.K. 6.9
OECD Average 6.4

what I am trying to show is that for no more than we are already spending on health through the government we could have a single-payer system no worse that those that exist in almost every other major country. My point is that this is an option that the administration should have at least floated and on which we should have had a national debate. I don’t think Americans would have embraced such an option, but as I said at the beginning it would have clarified the debate by focusing on the overall cost of our health care system—which I believe is far too great for what we get in return—and made reforms such as those that the Democrats have put forward seem modest by comparison.

Data from the OECD. Commentary from Bruce Bartlett’s excellent blog.

Published by

Ragged Clown

Based in San Jose, California

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