Economic snapshot | Health

Health care: U.S. spends more, gets less

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Snapshot for October 20, 2004.

Health care: U.S. spends more, gets less

By every measure, the United States spends more money on health care than any other industrialized country:  nearly five thousand dollars per capita on health expenditures.  The United States spends over two and a half times the average health expenditures of the 29 other nations in the OECD (Organization for Economic Cooperation and Development), adjusted for purchasing-power parity.  The next largest spender on health is Switzerland at $3,288 per capita.

At the same time, the United States is lagging behind in the actual health of the population.  Life expectancy is a standard measure used to compare health status across populations.  In terms of life expectancy, the United States ranks 21st out of 30, with an average life expectancy of 77.1 years. This is 4.3 years behind the highest ranked nation.

Health expenditures and life expectancy in 30 OECD nations
[Click here to view an Acrobat PDF version of this figure]

The figure shows the relationship between health spending and life expectancy.  A clear trend line can be traced from Hungary (with per capita spending of $961 and life expectancy of 72.3 years) to Iceland (with per capita spending of $2,680 and life expectancy of 80.3 years).  Countries that spend more on health typically have higher life expectancy.

A few notable outliers exist.  Japan has the “best bang for the buck,”  enjoying the highest life expectancy of all 30 OECD countries, but ranking in the middle (15th out of 30) in terms of health care spending.  At the other extreme is the United States, with the highest spending (1st out of 30 nations) and below-average life expectancy (21st out of 30).

This week’s Snapshot was written by EPI economist Elise Gould.

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