Does the U.S. REALLY Spend Twice as Much for the Same Quality Health Care?

about the importance of examining what goes into a statistic, and I’m reminded of that now as I read a John Goodman policy report from the Cato Institute. It is commonly argued that the United States has one of the more privatized health systems in the industrialized world, and yet we spend twice as many health dollars to receive the same level of care as nations with more state-oriented systems. The implication behind this, at least as I usually see it, is that our insurance-based health care system is wasteful, and we should seriously consider moving to a single-payer system.

I would agree that the insurance-based health care system that we have now is wasteful, of course, and I should also note that this is not the only (and probably not even the most common) argument for single-payer. But I do think people jump to conclusions from this specific “statistic” a little too readily in most cases.

Goodman notes–somewhat vaguely–that the “myth” in question usually rests on the fact that life expectancy does not differ much among industrialized nations and that the U.S. has an abnormally high infant mortality rate.

If the United States spends more than other countries, why don’t we rate higher than the others by these indices of health outcomes? The answer is that neither statistic is a good indicator of the quality of a country’s health care system. Other indicators are much more telling.

The author then notes that life expectancy is more a function of genetic and social factors than health care systems, and provides some preliminary statistics to back it up. He does the same for infant mortality, and then proposes a statistic that he claims is a far better indicator of health care system quality.

A better measure of a country’s health care system is mortality rates for those diseases that modern medicine can treat effectively. Take cancer, for example…in New Zealand and the United Kingdom, nearly half of all women diagnosed with breast cancer die of the disease. In Germany and France, almost one in three dies of the disease. By contrast, in the United States only one in four women diagnosed with breast cancer dies of the disease. This is among the lowest rates of any industrial country.

The story is similar for prostate cancer. Fewer than 20% of American men diagnosed with prostate cancer die of the disease as compared with 50% in the UK, 49% in France, and 44% in Germany. New Zealand and Canada check in at 30 and 25%, respectively. (The report was published in 2005, so I’m not sure exactly how accurate these numbers still are, but it actually won’t be relevant to the point I’m ultimately trying to make…all that matters is that they were accurate at the time).

Is the conclusion that should be drawn from this that the slightly more “privatized” US system of insurance-based health care is responsible for alleviating the burdens of breast and prostate cancer on patients? Of course not. The same way I’m skeptical of the whole “we spend double but receive the same quality of care” argument, those who don’t agree with me probably aren’t going to change their minds based on what I’ve written here. The point I’m trying to make is simply that stats can say a lot of different things depending on what goes into them and how you read them, and it’s always important to know exactly what a number represents before you use it to jump to conclusions.

Otherwise, of course, you might risk embarrassing yourself in front of your friends and co-workers with your horrible ideas…

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One Response to Does the U.S. REALLY Spend Twice as Much for the Same Quality Health Care?

  1. Pingback: Nicholas Kristof’s Appeal to Emotion and the ACA | Hamsterdam Economics

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