Interesting Chart on US Health Care Costs

Quote of the Day

I don't know what I think until I write it down.

— Joan Didion

I have family members who are involved in the US health care system and we often talk about what is good and bad about our system. Once aspect of the our system that none of us understand is why it is so costly considering the level of service it provides. I have tried to become more informed on the subject by reading all I can, including the books by Atul Gawande ? which are excellent. However, the answer still eludes me.

Clearly, there are countries that have good medical care for less cost than in the US. One of the engineers in my group was on vacation recently in Sweden with his family. While in Sweden, his daughter fell off her bicycle and broke her arm. She was taken to a hospital in Stockholm where he said his daughter received excellent treatment. He said that followup visits in Estonia and Iceland were also done efficiently and professionally. I have also talked to an engineer in our group from France, who also mentioned the excellent medical care that he received when he lived there.

During my reading, I encountered Figure 1, which shows a chart of life expectancy versus per capita health care expenditures (source).

Figure 1: Longevity Versus Health Care Costs By Country.

Figure 1: Longevity Versus Health Care Costs By Country.

I am stunned at our mediocre longevity outcome for such exorbitant costs. Another aspect of this cost that I do not understand is how much more US health care costs are dominated by the expenses for the elderly than in other countries (see this post). Everyone spends more on treating the elderly than they do for young people, but not like the US. This is even despite insurance policies being taken out. Dental insurance is often recommended for seniors since their dental expenses usually increase with age. In order to save money they should get a discount plan as early as possible, but this doesn't seem to have much of an impact on the cost of their care for the state.

More research to follow …

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4 Responses to Interesting Chart on US Health Care Costs

  1. Ronan Mandra says:

    Check out the article at: Unfortunately, you'll need a Time Subscriber account to access it.
    Basically, every hospital has a chargemaster, the hospital’s internal price list which is way high for most services, supplies and drugs. For example, from that article, an uninsured medical patient was charged $157.61 for a CBC in Connecticut whiles Medicare pays $11.02 for a CBC in Connecticut. By law, Medicare’s payments approximate a hospital’s cost of providing a service, including overhead, equipment and salaries.

  2. rjford says:

    Although a straight regression line has been drawn in the graph it is obvious that there is little correlation between the variables and the causes are not considered.
    An insurance based scheme such as in USA costs an extra 43% in commercial administration costs over a socially funded "free at point of use" scheme such as in UK. In UK all medicines and equipment is bought nationally in bulk so that keenest prices are obtained. In USA individual purchasing buys at the highest cost the seller can charge. Hospitals are encouraged to do any many unnecessary treatments as possible to raise income from the insurers. USA doctors are at the mercy of lawyers in that they dare not carry out high-risk curative procedures but carry out prolonged unnecessary treatments that stop them being sued for negligence. In UK the national system funds schemes to reduce people getting ill in the first place with free immunisations, regular free check-ups, schemes to reduce smoking, obesity and drug dependency etc. Politics in USA is delusional that socialised care free for all at point of use is costly and inefficient when the truth is the exact opposite.

  3. Dr. Goulu says:

    You may find very intereestings reports on health systems from OECD here : and especially this one on with (some) answers to your questions :

  4. Max says:

    The average life expectation deals a lot more with you eat and do every day, rather than the treatment you get when you are ill. If you are 30 Kg over the weight that you should have , you will live less than a person which eats well and a good fit, even if your bank account is much bigger and you are ready to spend a fortune when you are ill. It is much more about prevention. Just have a look to what a standard american eats every day and you'll get an answer.Hospitals and professionals are for sure good in the US, but this will not change statistics.

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