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U.S. Health Care: Spending Up, Efficiency Down

credit: commons.wikimedia.orgA pair of graphs from the Huffington Post and Bloomberg suggest spending and efficiency are not always connected, especially when it comes to heath care in America.

The United States ranked 46th out of 48 countries in a measure of the world’s most efficient health care countries, coming in below Saudi Arabia, Slovakia, China and the Dominican Republic. According to the Bloomberg graph, health care costs make up just over 17 percent of the U.S.’s GDP per capita, and  health care costs per capita is over $8,000. This is measured against an average life expectancy of 78.6 years.

The next closest country in terms of GDP per capita is the Netherlands, where a lower 13 percent GDP per capita measures against a higher life expectancy of 81.2 years. The U.S. did finish above Siberia and Brazil, where the average cost of health care per capita is $622 and $1,121.

The Huffington Post’s graph, which pulls its information from the OECD, shows that the U.S. spends “far and away more on health care than any other country.”

From the Huffington Post:

“What bothers me most is not that…we are lower than we should be,” Aaron Carroll, professor at the Indiana University School of Medicine wrote on his blog of the chart. “It’s that we are all alone. We are spending so, so, so much more than everyone else.”

You can look at the Bloomberg chart and the Huffington Post chart by clicking the links.

3 Comments Post a comment
  1. Katy Delay #

    I would agree that the existing US health care system is not as rosy as Boehner says. However, in my opinion, both source articles are too incomplete to be the foundation of such a definitive conclusion about its lack of efficiency. Too many undefined parameters exist in both graphs (e.g., Bloomberg: apparently the only measure is longevity versus the two cost parameters, without mentioning other factors contributing to longevity such as obesity, food quality and availability, genetics, and what else?). A makeover of our system is surely needed, but neither the graphs nor the HP article do much more than stir up some dust.


    November 26, 2013
  2. Thanks for your comment! I agree, there are other measures necessary to fully evaluate the efficiency of our health care system. I think the important point here is that the cost of healthcare in our country is far exceeding the quality of care and the efficiency of our delivery system. Total health expenditure in the US is the highest in the world, showing that services like preventative care and emergency aid are overpriced and inefficient. There is widespread debate about how and if the Affordable Care Act can decrease the costs of healthcare overtime and make our healthcare systems more efficient. If it does it will be a lengthy process, so don’t expect much change in the rankings over the next few years.


    November 27, 2013
  3. jb #

    The Bloomberg “study” is drivel, based on bad data and faulty reasoning. Linking to it does not reflect well on AIER. The OECD ranking of the #27 in life expectancy was pretty well trashed a while back by AIER (yes, that AIER). To quote: “The U.S. also has an unusually large number of deaths from accidents and homicide. Robert Ohsfeldt, a Texas A&M health economist, and John Schneider, a health economics consultant, showed that if we consider only deaths from other causes, U.S. life expectancy becomes the best in the world.” I recommend the AIER link, it’s a solid assessment of how many difficulties encountered in comparative life expectancy data.

    The Bloomberg “index” is also peculiarly weighted, 60% to life expectancy, 30% to what they call “relative per capital cost of health care” and 10% to “absolute per capita cost of health care”. First, there is no stated rationale for these particular weights. Second, it is late as I write this and I’m tired but if I did the algebra right the second parameter reduces to health care as a percent of GDP — they don’t seem to realize that the “per capitas” cancel out (I’m not sure the significance of that, but it gives on pause…).

    There are many other deficiencies, for example why is life expectancy the only criteria here to begin with? What about QUALITY of outcomes, from what I understand you can spend several months in pain while waiting for a new hip in Canada, not so in the U.S. Hundreds of other examples can be found…

    Jules I don’t understand your comment that “I think the important point here is that the cost of healthcare in our country is far exceeding the quality of care and the efficiency of our delivery system.” I don’t know what that means (there are costs incurred, and outcomes. How can “costs exceed efficiency?” I fail to see any point at all,


    December 8, 2013

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