R-E-P-O-S-T — SCOTUS To Review ObamaCare: Where Is U.S. Health Care Compared To The World?

The U.S. Supreme Court is going to did review the constitutionality of ObamaCare… sounds like a good time to review what this plan is designed to address — namely, controlling costs while increasing health outcomes and providing health care access to all citizens.

Though I can’t fathom that anyone — liberal or conservative — would possibly be against these benchmarks (we can disagree how to get there), ideology and lack of empathy seem to predominate our national discussion. Still, it’s worth reviewing why extending health care access to all citizens, improving our national health outcomes, and controlling costs should be attempted.

And, the main points are that we have the most expensive system in the world with the poorest outcomes of all industrialized nations.

Oh? So what’s that mean? Let’s take a look at how far off base we are from a reasonably efficient and effective system compared to the world.

It’s the best health care system in the world!? But, compared to what?

It’s well known (among folks that care about such things) that the United States spends a lot more per person on health care than comparable countries and that our actual health outcomes are anywhere from average to bad. See, for example, the chart below from a 2008 paper by Gerard Anderson and Bianca Frogner.

This chart above shows the extent to which each nation’s health care spending and life expectancy differ from what is expected, based upon the income of the nation (per capita GDP) and standard deviations. As readily seen, the U.S. spends a HUGE amount more with lives a lot SHORTER.

Sure that doesn’t look good… But aren’t we improving?

OK, so that’s where the U.S. is today, but where we are going? Hasn’t the nation been in the midst of a decade’s long pursuit of cost containment and cost sharing? Surely we’re seeing some results and improvements for all the efforts and increased financial burdens upon individuals and families?

Change in a massive system such as the U.S. health system takes time to occur. So even if we have a inefficient, expensive health care system, maybe it is getting relatively better and relatively less expensive. Nope. We’re getting worse… so all this effort is not working.

The chart below, from the OECD data, highlights the change seen in each nation’s per capita spending and life expectancy relative to all other countries. The data are standardized so that we’re seeing the number of standard deviations of each country away from the statistical mean of the whole in 1992 and in 2007.

Obviously, not only is the United States the outlier in terms of spending, we are moving in the wrong direction altogether!

The U.S. is becoming more of a spending anomaly, as our average life expectancy degrades into the lower group (currently surpassing only Turkey, Hungary, Mexico, Poland, and Czech Republic)!

Are you sure you’re looking at that right?

Another way to look at the situation is to look at actual values rather than standard deviations, as in the chart below, indicating actual increases in life expectancy and percentage increases in nominal per capita health care spending. The axes are located at the averages of these countries: the average spending increase was 132 percent and the average life expectancy gain was 3.7 years.

So, in percentage terms, health care costs have been growing in the United States a bit faster than in other comparable countries (poorer countries increased spending more rapidly).

Our life expectancy gain was the absolute lowest of the whole group, however  — starting from a low level already.

Isn’t the Marketplace supposed to correct for these disparities?

According to market theory, one would expect to see convergence across countries over time — meaning that since other countries spend less and live longer, the U.S. would learn from their examples and adjust accordingly… fulfilling the mantra of global competition. Instead we’re moving the wrong way on both dimensions.



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