Home > health > The efficiency of the US health-care system relative to those of other wealthy countries

The efficiency of the US health-care system relative to those of other wealthy countries

from John Schmitt

Lane Kenworthy has posted two extremely helpful graphs that try to gauge the efficiency of the US health-care system relative to those of other wealthy countries. The first shows life expectancy in each country, in 2007, against per-capita health expenditures in the same year.

National life expectancy versus per-capita health expenditures, 2007Source: Lane Kenworthy.

The United States is a huge outlier. We spend the most –by far– and yet we also have the lowest life expectancy.

But, as Kenworthy notes, the US could be an outlier for reasons that don’t have to do with the efficiency of our health-care system. Our life expectancy might be lower because we have a much higher murder rate or a much higher incidence of obesity, for example. So, he offers a second graph that, for the same group of countries, traces out the relationship over time between life expectancy and per-capita health expenditures. In this graph, we can see to what extent additional health expenditures help to reduce life expectancy within each country.

Life expectancy versus health expenditures, 1970-2008Source: Lane Kenworthy.

The United States is still a substantial outlier. In every other country in the sample, extra health-care spending is associated with much higher increases in life expectancy than we see in the United States.

Neither graph proves causality, but both –and especially the second graph– suggest that the US health-care system is expensive and inefficient relative to the systems in place in other rich countries.

  1. Jimmy
    September 27, 2011 at 4:07 pm

    USA = third world.

  2. Podargus
    September 27, 2011 at 7:21 pm

    Seems like the US health care “system” is a classic case of privatization gone stark raving bonkers.

  3. Wasabi
    September 28, 2011 at 4:56 am

    Primary Obama. Demand Medicare for All.

  4. AJG
    October 3, 2011 at 6:38 pm

    I find it interesting that the US life expectancy/health expenditure graph follows the pattern of other developed countries up to a certain point (around $2500/capita) and then starts to relatively decline with increasing investment.

    Not too long ago, people didn’t live longer than their fifties. Why does this divergence start at $2500/capita (or on average 75 years of age)?

    I wonder how this graph would look if different segments of the population were compared, i.e. relatively rich people in the US vs rich people in these other countries and relatively poor people in the US vs poor people in these other countries.

    I would also liked to have seen the ages go further up. If, for example, it would be other factors like obesity in the US influencing these graphs we would see a similar decline in returns from healthcare investment in other rich countries, albeit at a higher age.

    In other words, if people are relatively more healthy further up in their years in other rich countries (and this is a result of factors other than the healthcare system), returns to increases in healthcare spending would start to decline later.

    “If I’m super-fat when I’m 75, it doesn’t matter how much money I have: I’m going to die early anyways. But if I `turn superfat’ 10 years later, when I’m 85, my money invested in healthcare will matter up until this age.”

    If the US healthcare system would simply be “more inefficient”, i.e. give less returns per invested dollar, wouldn’t the US line in the lower graph just have been shifted to the right?

    As it appears now, the US healthcare system “becomes” more inefficient at a certain point of investment or age, which would imply at least *something* else (even if the above is completely off the bat).

  5. Falstaff
    October 14, 2011 at 4:24 am

    Life expectancy? Please. Try again with five year survival rates for breast cancer victims, or heart bypass patients, or anything you like as long as it is directly related to the medical system and not thrown in with car wrecks, homicides, a susceptible gene pool, etc. when comparing 2-4 years of life expectancy.

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