In the recent, contentious healthcare debates in Washington, one of the very few points of agreement was that the system needs fixing. The resultant legislation is likely to address one major problem: the large number of uninsured Americans. This should produce health benefits: a 2008 study by economists at the University of Michigan found that an increase of 10% in the rate of the population with coverage reduced the rate of mortality by about 1.8%.
What remains to be seen, however, is how well reforms address the issue of cost. In this respect, change is essential because Americans are not getting what they pay for when compared with other countries. In 2007, according to the OECD, 16% of GDP in the US went towards healthcare, whereas most other developed countries spent between 8% and 11%. This translated into spending per head of US$7,290, nearly two and a half times the OECD average expressed in purchasing power parity—higher still in absolute terms.
Data from the Economist Intelligence Unit’s Health of Nations Index, however, show that this higher spending is not buying better health. In terms of system inputs covered by the index—largely healthcare personnel and vaccinations—America is just average. In 2007, only 93% of children had been vaccinated for measles, putting the country behind Russia and China. Among developed countries, the US actually scores below average on inputs, placing it in the same category as Greece and Italy, which spend per head only about 36% as much as the US.
These numbers would not be so bad if the inputs were of a higher quality, as shown by superior outcomes. But the results are even more discouraging. The US scores as only average overall on outcomes, and well-below average among developed countries. Venezuela, with very sub-par inputs and a governance model few would advocate, still achieves similar overall results: its life expectancy at age 60 (21.6 years) is only slightly less than that for the US (22.6). Canada, which spends far less per person—and is still experiencing funding issues of its own—provides a similar level of inputs to the US and gets better outcomes. Its 2007 adult mortality rate of 72 per 100,000 far outperforms the US’s rate of 108.
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