U.S. Health Care—Spending More and Living Less

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Not the best health care system money can buy.

A new study by Columbia University researchers Peter Muennig and Sherry Glied in the journal Health Affairs, according to the study's press release, disturbingly found:

While the U.S. has achieved gains in 15-year survival rates decade by decade between 1975 and 2005, the researchers discovered that other countries have experienced even greater gains, leading the U.S. to slip in country ranking, even as per capita health care spending in the U.S. increased at more than twice the rate of the comparison countries. Fifteen-year survival rates for men and women ages 45 and 65 in the US have fallen relative to the other 12 countries over the past 30 years. Forty-five year old U.S. white women fared the worst—by 2005 their 15-year survival rates were lower than that of all the other countries. Moreover, the survival rates of this group in 2005 had not even surpassed the 1975 15-year survival rates for Swiss, Swedish, Dutch or Japanese women. The U.S. ranking for 15-year life expectancy for 45-year-old men also declined, falling from 3rd in 1975 to 12th in 2005,

The study controls for possibly confounding factors such as differentials in smoking, obesity, accident and homicide rates, and ethnicity. So how bad is it? The study authors don't provide the raw data, but eyeballing their graphs in the article and appendix provides a rough idea of the magnitude of changes in survival rates that occurred between 1975 and 2005.

For example, in 1975, the 15 year survival rate for U.S. women at age 45 was about 91.5 percent. It was then the lowest of the 13 industrialized countries included in the study. By 2005, that had increased by 2.5 percent to about 94 percent. In 1975, the average for the 12 comparison countries appears to have been about 93.3 percent, rising by 2.9 percent to a bit over 96 percent. It remains the lowest 15 year survival rate.

For men, in 1975, 84.7 percent of U.S. 45-year old males survived 15 years, rising by 5.7 percent to just over 90 percent by 2005. In 1975, the comparison country average appears to have been 87 percent, rising by 6.3 percent to around 93 percent in 2005.

With regard to 65 year old American women, about 63 percent survived 15 years in 1975, rising 7.7 percent to around 71 percent in 2005. In 1975, the comparison country average was about 60 percent, rising a remarkable 17.4 percent to average 77 percent in 2005.

And for 65 year old American men, about 43 percent survived 15 years in 1975, rising by 17.6 percent to just over 60 percent in 2005. In 1975, the comparison country average was about 40 percent, rising by 21.6 years to around 62 percent.

In the meantime, the study shows that U.S. per capita health spending increased at nearly twice the rate in other wealthy countries. Consequently, the U.S. now spends well over twice the median amount of industrialized nations on health care, and far more than any other country as a percentage of its gross domestic product. So why are we doing so much worse relatively speaking? Muennig and Glied opine:

We speculate that the nature of our health care system—specifically, its reliance on unregulated fee-for-service and specialty care—may explain both the increased spending and the relative deterioration in survival that we observed. If so, meaningful reform may not only save money over the long term, it may also save lives.

Muennig and Glied are clearly supporters of some sort of universal government-run health care scheme, so they do not explore how our fragmented system evolved into the inefficient, dysfunctional mess that we all enjoy today. For future research, I suggest that they might profitably investigate the inefficiencies produced by third party payments, a health insurance market fragmented into 50 fiefdoms, the practice of defensive medicine, regulations designed to prevent competition, the the lack of incentives for patients to comparison shop, and so forth. That might result in truly "meaningful reform."

Hat tip to Mark Sletten.

NEXT: The Politics of Proposition 19

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  1. In the meantime, the study shows that U.S. per capita health spending increased at nearly twice the rate in other wealthy countries.

    And what, exactly, is “health spending?” Without knowing what the figure is measuring and how, it’s pretty meaningless.

    1. Medicare.

      Its like running a buffet and the dieters are charged $20 a head to eat lettuce and the sick obese fucks are in the front of the line with $2 early bird passes.

  2. JW: It’s basically this OECD data.

    1. So, Ron. I’ve gotta ask why you didn’t thread this comment. It was obviously in response to JW.

      Just asking.

  3. Of course, the Swiss, Swedish, Dutch and Japanese all have socialized medicine (and complicated rules on the parts of their markets that are private). These stats do not support a libertarian policy position at all.

    1. Switzerland does not have socialized medicine.

      In Switzerland, you are required by law to purchase private health insurance which has a set of minimum coverage they are required to provide.

      1. That’s arguably still partially socialized medicine, just a lot less than elsewhere.

        Completely non-socialized medicine: everyone gets to buy any health care they want without any government interference whatsoever. Being required to buy health insurance, and being told what plans you can buy, is not laissez faire free markets.

      2. In Switzerland, you are required by law to purchase private health insurance

        We’re all Switzerland now.

    2. These stats do not support any statist position, either, since health care in the U.S. is anything but libertarian.

      Veterans — fully socialized medicine.

      Medicare — partially socialized medicine.

      Medicaid — partially socialized medicine.

      Everything else — somewhat less socialized medicine than the above.

      Also, the point of health care is not just living longer. Hospice care does not make one live longer — are you saying we should eliminate it to make government stats better? How about eliminating Viagra because it doesn’t increase life expectancy? My wife puts total hips and knees in her patients — doesn’t make them live longer, but suddenly they are pain-free and mobile. Waste of money? Really?

      And then, there’s this — most early mortality is driven by lifestyle, not levels of medical care. People live longer in Utah because it’s full of LDS who don’t smoke or drink or do other things that can kill you.

      1. And since the market of providers is manipulated to remain relatively small, our market is not nearly free.

      2. My wife puts total hips and knees in her patients — doesn’t make them live longer, but suddenly they are pain-free and mobile. Waste of money? Really?

        I agree with everything you said except one minor quibble.

        Hip and knee replacment can lead to an indirect extension of life. By keeping patients mobile and non-sedintary, their life expectancy will go up due to the avoidance of complications stemming from an aging, sedentary lifestyle.

        1. Perhaps that’s a minor bump in life expectancy, but life extension isn’t the reason these patients want and get hips and knees. And since many of them are in their 70s or 80s or 90s, their life expectancy isn’t that great either way.

          Under socialized medicine, they might be told to just suffer.

      3. You make an interesting point wrt viagra and hip/knee replacements. I wonder how much US medical spending is on procedures and medicines that are aimed more at quality of life than length of life. I understand that the NHS and some other nationalized systems use cost-effectiveness formulae to determine whether to pay for new treatments. Depending on how quality of life is weighted in that formula, it could rule out treatments that have little benefit on length of life but lots of benefit on quality. I wonder if US medical spending would look as high if it were statistically adjusted to have a similar mix of procedures as those other countries.

    3. They don’t support a pro-Medicare or US government healthcare position at all, either, considering that the survival rates for US people once they reach age 65 are just as bad. (Not that the under 65 US system doesn’t have a lot of socialistic rules and government involvement and spending.)

      Medicare regulates rates and payments and everything else. And yet Medicare has the same statistics of higher cost/worst outcome comparing to over 65 medical care in those countries as our under 65 medicine does. So does Medicaid.

      Give that, is there any reason to expect expanding Medicare/Medicaid to
      everyone would actually make US spending look like other countries? Or is it more likely that universal Medicare would… look like Medicare, and still be more expensive for living less?

    4. During the time between 1975 and 2005, did government get more, or less, involved in healthcare?

  4. Today’s installment of “having a PhD doesn’t mean you have a brain”. Only in academia does the assumption of a 1-to-1 correspondence between health service use and mortality rates make sense.

  5. Geotpf: Actually, the Swiss system, although requiring citizens to buy health insurance,is relatively free market. Insurance companies are private and poor citizens are given vouchers to purchase private health insurance.

    In any case, I hear what you’re saying, but I would suggest that there is another way to look at the issue. The problem is that we do not have any free market health care systems with which to compare the government run systems in other relatively wealthy countries. For example, there is no system in which the majority of people can choose (or not) to purchase their own health insurance using their own money. Right now about 50 percent of all health care expenditures in the U.S. are supplied through Medicare, Medicaid, and SCHIP.

    Of course, there is possibility that as countries become richer, some kind of a deep political dynamic emerges which nudges people toward voting to put medical care outside of markets.

    If we must move in direction of universal health insurance schemes, I strongly hope that we adopt something like the Swiss system, and ditch the horror show that Congress just enacted.

    1. I’ll agree with a lot of this. Simple is better. The problem is, the Ben Nelsons of the world want complicated, and to pass anything, you need their votes.

    2. So what I hear you saying is that half of our health expeditures are performed very ineffeiciently by the gummint and the other half the prices are grossly distorted by deliberate actions of the gummint.

      Of course, the answer is clear in that situation. More gummint.

      1. Where can I send the check?

    3. Actually, the Swiss system, although requiring citizens to buy health insurance,is relatively free market. Insurance companies are private and poor citizens are given vouchers to purchase private health insurance.

      Sounds a lot like the Dutch system. Everyone has to carry a minimum policy, you can get assistance with premiums if you are po’, and you can buy up if you aren’t.

      1. I refuse to accept that the Swiss or the Dutch have any poor people.

    4. For example, there is no system in which the majority of people can choose (or not) to purchase their own health insurance using their own money

      That’s the real problem.

      A free market would sell the obvious solution to the PEC problem: a permanent right of renewal.

      Unfortunately our idiot gov’t tied the whole thing to employers so most people have little choice what their plan looks like.

      1. “Unfortunately our idiot gov’t tied the whole thing to employers…”

        Yep. The fundamental flaws in our current healthcare system – employer based coverage and a lack of interstate competition – are continued under the alleged reform plan.

        I really hate it when that happens.

  6. A solution, then, would be to choose an age–say, 30–where citizens would voluntarily self-immolate to ensure that our healthcare system would remain effective and solvent? Perhaps through some sort of public event where we all come together to celebrate their self-sacrifice? Maybe involving a carousel of some sort?

    1. Lol.. RUN!!!!!

    2. I’m not getting the book or movie you are referring to. Link?

      1. E.T..

        1. With just two periods.

    3. I recommend a Lottery

    4. yes, but think of all the good things that society had…3-D holographic versions of eHarmony!

      1. Domed cities, togas, and teleportation. Yes, tell me more!

        1. Scantily clad Jenny Agutter. What else do you need?

          1. See Walkabout. You can use your male gaze all you want.

          2. Scantily clad Jenny Agutter. What else do you need?

            More than 30 years minus the age of puberty in which to fuck her?

            1. PS She still looks amazing. Hachi machi!

  7. Ron: Third party payment is a big part of the problem. However, it is a problem that is independant of who pays for the insurance (public vs private), and therefore is not an argument for or against either.

    Take a look at the systems in Singapore or Japan. Both use high co-pays to keep spending in check. There is nothing wrong with this idea.

    However, mythical “free market” health insurance suffers terribly from adverse selection, and is inherently unstable because of it. Even if someone tried to create it, it would collapse sooner rather than later due to healthy people opting out, driving up prices, causing more healthy people to opt out.

    The only solution to adverse selection is to insure everyone all the time in the same manner.

    1. Even if someone tried to create it, it would collapse sooner rather than later due to healthy people opting out, driving up prices, causing more healthy people to opt out.

      Just like all the people with less fire hazards opting out cause the fire insurance market to collapse, the people less likely to die cause the life the insurance market to collapse.

      Clearly, only government can sell insurance.

      1. TallDave, we have discussed many times the difference between insuring one-off events (fire, auto accidents), and insuring against chronic conditions (most health problems).

        You cannot feasibly separate chronic and one-off health events, and since you cannot insure against the former, you de facto cannot insure against the latter. “Free market” health insurance has never existed and never will.

        1. Why can’t chronic conditions be separeted form one-off events, with relatively free-market high deductible insurance (probably still some subsidies for the poor and especially risky) for the latter and non-insurance subsidized management plans for the former? When someone was diagnosed with a chronic condition like diabetes or hypertension, the would be eligible to enroll in a management plan to cover routine care like prescription drugs, testing, doctor visits, and if/when the chronic condition led to an expensive one-time event (heart attack), the insurance would kick in to pay for that event.

        2. Why can not chronic and one-off health events be feasibly separated?

    2. However, mythical “free market” health insurance suffers terribly from adverse selection, and is inherently unstable because of it. Even if someone tried to create it, it would collapse sooner rather than later due to healthy people opting out, driving up prices, causing more healthy people to opt out.

      In the actual history of market medicine, this is exactly what didn’t happen. Instead, healthy people formed mutual societies and purchased health care services through lodge practices.

      Kevin Carson on Free Market Medicine

  8. Take a look at the systems in Singapore or Japan. Both use high co-pays to keep spending in check. There is nothing wrong with this idea.

    A free market system has the highest copays of all. If we had a truly free market system, then public expenditures on healthcare would drop to nearly zero.

  9. Claiming this has anything to do with health care is very silly. The confounding factors are much larger than health care’s effect and the differences are probably small compared to the measurement error anyway.

    This is like measuring the income of people that eat at McDonald’s and concluding that hamburgers are the cause of poverty.

    For the record, we have the best actual health care in the world.

    1. Link again.

      As broken as our system is, it’s less broken than anyone else’s. And remember, all the treatments that are developed for us are essentially stolen by their socialized systems, so they get to free ride on our healthcare dollars just as they do on our defense dollars.

  10. a health insurance market fragmented into 50 fiefdoms

    “Fiefdoms”? That’s how we describe federalism today?

    1. When states are used as mechanisms to support monopolies, it sounds like an apt term to me.

  11. I don’t know if anyone else read this study, but it is a piece of garbage, in my opinion. The data that they used is not available, only some graphs, and their “conclusion” that non-socialized healthcare is the reason for the differences they found isn’t based on anything in the study. In fact, the increase in mortality likelihood that they found seems to have no explanation at all according to them. In the end, they can only say well, we think this might be it, but we have no data showing it”. There are many problems with their data gathering, methodology, and conclusions. In short, the study stinks.

    1. CP: I think you’re being a bit too harsh, but its credibility would have been greatly enhanced by including more of the raw data in the study’s appendix. And one cannot avoid the small sneaking suspicion that the researchers had a particular conclusion in mind before beginning their study.

  12. Great, nice sharing. thanks for the post

  13. Infanticide — now that’s an idea! Less nonpayers in the system.

    1. Whoa, slow down now, we have form a panel of experts for the selection process.

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