US Government Spends More on Health Than Any Other Industrialized Nation

Catherine Rampell explains how U.S. Health Spending Breaks From the Pack:

Despite the fact that the United States is the only industrialized nation that does not ensure that all its citizens have health care coverage, the United States spends a (much) higher percentage of its gross domestic product on health care than its peers. It also spends (much) more per person on health care than its peers.

But that hasn’t always been the case.

percent of G.D.P. spent on health care, OECD countriesSource: Organization for Economic Cooperation and Development

The Organization for Economic Cooperation and Development recently released updated historical statistics on health care, showing that health expenditures have risen drastically across the industrialized world.

As demonstrated by the mass of squiggles in the chart above, the United States has generally been at the high end of health care spending. But once upon a time, it was more or less on par with its peers, and at various points even spent less of its G.D.P. on health care than some other countries (namely, Canada, Sweden, Denmark and Germany).

There were also a few years when it wasn’t the biggest spender per capita on health care, in purchasing power parity terms.

health spending per capita in US 2000 PPP dollars, OECD countriesSource: Organization for Economic Cooperation and Development Data shown are in United States 2000 purchasing power parity dollars.

Although you could quibble about the exact trajectories, it seems to have been in the late 1970s or early 1980s that America’s health care spending really broke from the pack.

Since 1980, the portion of G.D.P. that America spends on health care has risen by about 7 percentage points, whereas the average for other Organization for Economic Cooperation and Development countries has risen by 2.3 percentage points. Health expenditures per capita in the United States have likewise more than tripled since 1980, adjusting for inflation. The average for the rest of the member countries, where data are available, has more than doubled.

It is important to point out that the problem is not the fact that not everybody is ensured. The root of the problem is that health care is simply too expensive. I already explained this in Fixing Health Care in the US:

Any proposal that suggests even more government involvement, decrees, and spending than we already have, needs to be rejected unconditionally.

If you want to look for true solutions, listen to those people who recommend the opposite of what we have been doing for the past decades, and in particular the past 8 years, during which President Bush presided over an increase of public health care expenses on the federal level of no less than 100%.

Listen to the people who recommend to get the government out of health care, to spend less on Medicare and Medicaid, and to get rid of government decrees and rules that aim at regulating the market for health products and services.

Only then will the dream of affordable health care for every single American become reality.

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6 thoughts on “US Government Spends More on Health Than Any Other Industrialized Nation”

  1. This looks like propaganda from the Medical Insurance Industry.

    Health care is too expensive in the U.S.

    That may be a reason that they spend so much on it.

    Make it affordable for the average person!

    It doesn’t have to be ‘free’!!!


  2. Yes, this is exactly what I am saying. Health care it too expensive in the US.

    Not sure why you think this is propaganda by the Health Care industry. They are the biggest beneficiary of this system. If anything they would sure as hell try to NOT let people know how their government is ripping them off.

  3. What happened in 1980? John Stossel also showed a chart where all of the sudden the costs started skyrocketing. Like, 90 degree angle skyrocketing. What changed?

  4. I agree with NotFallingFortheBS and als think that it is propaganda … BUT NOT THAT BY THEEEE MEDICAL INSURANCE INDUSTRY!!!

    Can’t you block such comments. It is almost worse than spam …. hm, now that I think about it IT IS worse than spam :-)

  5. I could block such stupid comments, but I believe that an open discourse is more healthy and may actually produce new ideas. :)

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