Health and Healthcare Systems

This one chart shows how far behind the US lags in healthcare

Pharmaceutical tablets and capsules in foil strips are arranged on a table in this picture illustration taken in Ljubljana September 18, 2013.  Picture taken September 18. REUTERS/Srdjan Zivulovic (SLOVENIA - Tags: HEALTH) - RTX15K29

Is the money we're spending on health care keeping us alive? Image: REUTERS/Srdjan Zivulovic

Christopher Ingraham
Writer, Wonk Blog
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United States

Is the money we're spending on health care keeping us alive?

On a certain level, that's the big test of any health-care system — and the United States is failing.

According to above chart, U.S. life expectancy continues to lag far behind other developed countries, despite spending way more on medical treatments aimed at keeping us alive.

The chart, courtesy of Oxford economist Max Roser, plots per-capita health-care spending against life expectancy for the world's wealthiest countries over the past 40-plus years. Each country gets one line, which plots its trajectory on those measures over time.

Image: OECD

Looking at the chart, two things become clear: As Roser notes, the big takeaway is that, in wealthy countries, more spending on health leads to a longer life expectancy.

But there's a secondary finding: Not all health-care spending is created equal. In the United States, the inflation-adjusted per-capita annual health spending has exploded from 1970, when it was less than $500 a year, to 2014, when it was about $9,000 a year.

That's $2,000 more per person per year than the second highest-spending country on the chart, Switzerland. But despite that big spending, growth in American life expectancy has been anemic. Essentially, we spend a lot of money but haven't seen much in the way of life expectancy gains because of it.

The comparison with Japan is instructive. In 1970, average life expectancy in Japan was 72 years, similar to the expectancy of 71 years in the United States. By 2014, U.S. life expectancy crept up by eight years, to 79. But in Japan, life expectancy grew by a whopping 12 years to 84. And today the United States spends more than twice as much on health care, per capita, than does Japan.

There are a lot of factors influencing these numbers, particularly on the longevity side of the equation: differences in lifestyle and eating habits, exercise, culture, etc. But on the spending side there's an elephant in the room: According to the Organization for Economic Cooperation and Development, the United States is the only country on the chart that doesn't have universal health coverage.

Life expectancy is a great shorthand for overall health and well-being. After all, as economists David Cutler, Angus Deaton and Adriana Lleras-Muney wrote in 2006, “The pleasures of life are worth nothing if one is not alive to experience them.”

But the importance of life expectancy, and the country's dismal standing in it, suggests the United States should be more than a little skeptical when any politician — as they so often do — proclaims that any policy changes threaten to change “the greatest health care system” in world history.

After all, if our health care is so great, why are we paying more and dying sooner?

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