Thursday, March 01, 2007

Is universal health care affordable in the U.S.

U.S.A. is the only Western country in the world (except South Africa, if you consider that a Western country), that doesn’t have universal health care. This is something that most Europeans, even the more right-winged ones, find appalling. However, for this to change, it must be shown to be economical feasible for the US to go over to universal health care without a reduction in the level of health care.

To see if this is feasible, I’ve tried to do a little number crushing on some numbers from the US and other Western countries. I don’t claim that this number crushing in any way can be considered definitive, but at least it gives an indication.

Cost of current system

There is no doubt that the current US health care system is by far the most expensive in the world, both when considering cost per capita and percentage of GNP. This was not always the case, as you can see in the tables, the US was in the high end in 1970 and 1980, but in 1990 was far above the rest of the countries, and in 2003 even more so.

Source: Health Care Spending in the United States and OECD Countries

Health care quality

The counter-argument to the focus on health care costs is usually health care quality, so it’s necessary to take this into account. Since it’s hard to quantify what health care quality is exactly, I’ve tried to take a look on some health parameters published by the WHO.

The first parameter I looked at was life expectancy in the same countries as we looked at before. I know that my own home country, Denmark, ranks fairly low in this compared to other Western countries (mostly due to smoking and alcohol), and it’s something that there is great focus on in Denmark. Given this, it’s not too good that the US ranks equal to Denmark.

Other health care indicators are infant mortality and maternal mortality rates. Here the results are mixed. The US is the country with the highest rate of infant mortality, but is not quite as bad when it comes to maternal mortality. However, the US is still the country with the 4th highest rate (btw. what’s up with Luxembourg? That maternal mortality rate is quite frightening).

It seems like that the quality of health care in the US doesn’t do particularly well compared to other Western countries.

Availabilty of health care

Then, there is the availability of health care. I know that in Denmark, Australia and Canada there have been some debate about lack of facilities, so this seemed worth considering as well.
The US holds up little better in this regard. They are only the 5th lowest ranking when considering number of physicians per 1000 population, but are 2nd lowest (above Sweden) ranking when counting number of hospital beds per 10,000 population.

Government spending

So all in all, Americans don’t seem to get much for their money. This might seem surprising, but when you consider the fact that private health care need a lot of administration, it might make sense. However, there is more to the story. When looking at the WHO data, I noticed that it was possible to see what percentage of the health care cost that is government and private.
Unsurprisingly, the US has a much lower percentage governmental expenditure than the rest of the Western world, but the number is probably much higher than many would expect. 44.6% of the total health care expenditure is paid by the government in the US.

As a matter of fact, when looking at government spending per capita, the US is ranking 7th, just below Sweden and Denmark, and when you take the relative buying power into consideration, the US is actually ranked 4th, above Sweden and Denmark.


As I have shown, the US not only uses more money on health care than any other country in the world, both per capita and as percentage of GNP, yet there are no indications that this have a positive effect on the performance of the US health care system. Not only that, the government expenditure per capita to health care is actually on par with countries with universal health care, especially when relative buying power is taken into account.
Given all this, it would seem that a shift to universal health care not only could result in little, or no, increase in government expenditure, without adverse effect on the quality and availability of the system. A shift to universal health care would also reduce private expenditure to health care, leading to an overall reduction of expenditure.



Blogger Kaethe said...

Lovely. Simple, easy to understand. I keep saying we should switch, but no one listens to me.

March 01, 2007 10:03 PM  

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