Part 3: A Sick Deal

Who has the best health care system in the world? And why isn’t it us?

Let’s say you wanted to shop for the best health care system in the world. How would you know it when you saw it? 

The easiest way to compare health care across 190+ countries is to find out where people live the longest. Call it the ‘proof is in the pudding’ approach. For this we can turn to the UN Human Development Index.

At first glance, the leaderboard is not surprising. Very wealthy countries rank very highly in terms of average life expectancy.

Looking closer, some interesting outliers pop up. A handful of Mediterranean countries punch well above their weight, enjoying better health outcomes than we would expect based on their national incomes. Spain and Italy rank 4th and 6th in terms of life expectancy, even though their national incomes rank 33rd and 31st, respectively. Greece ranks 24th in life expectancy despite a national income that’s only a fraction of these other countries.

For the most part, though, the 30 wealthiest countries are among the 30 longest living. With a glaring exception.

The United States is the 11th-wealthiest country in the world. Yet we don’t even make the top 30 when it comes to life expectancy.

The United States is the 11th-wealthiest country in the world in terms of national income per person. Yet we don’t even make the top 30 when it comes to life expectancy. Americans come in 36^th here, with an average lifespan of less than 80 years.

This is not because we don’t throw enough money at the problem.

Public + Private Health Care Spending

In Part 2 of The Bargain we discovered that the United States allocates more of the public purse to health care than any other wealthy OECD country. Health care spending in the US consumed nearly one in four government dollars, or $5,380 per person, in 2016.

By comparison, the Japanese government—which presides over the country with the longest lifespans as we saw above—spent only $3,201 per person on health care. The Swedish government, itself no slouch when it comes to public spending, allocated about the same amount—$3,365 per person.

When you total up all government spending across federal, state, and local levels, the US government shells out $2k more per person on health care in a given year than Japan or Sweden. Yet our citizens don’t live as long.

Worse still, all this government spending doesn’t even capture the out-of-pocket costs of American health care. Think deductibles, premiums, co-pays, employer contributions, etc. If you add up public and private health care spending in the US, the total nearly doubles to $9.5k per person. 

Predictably, countries like India that don’t spend much on health care don’t get much either. But a trio of countries—Chile, Costa Rica and the Czech Republic—spend a small fraction of what Americans do per person, and yet they somehow achieve the same level of life expectancy as we do. This is true even if you account for differences in local prices, comparing health care dollars at purchasing power parity (PPP) as the figures do here.

Whether you look at it in terms of public or private spending, all this money doesn’t buy longer life for the average American.

Whether you look at it in terms of public or private spending, all this money doesn’t buy longer life for the average American. Why not?

Access and Quality

Somewhere between national wealth and national health lies the level of access to quality care. It doesn’t matter how much money you throw at a system if it isn’t wired to provide all citizens with modern medical attention.

True enough. But how do you measure access to quality care across 195 different national health systems? There is a morbid but intuitive solution, it turns out.

One way to compare health care systems at a glance is to draw up a list of medical conditions that can kill if not properly treated. Think tuberculosis, pneumonia, or appendicitis. Next, find out how many people die from them in a given year. In countries where we consistently see people dying from conditions that modern medicine knows how to treat, we can say something about level of access and quality of care in that system. 

Like I said. Morbid, but intuitive. 

A study funded by the Bill and Melinda Gates Foundation recently did just this. It identified 32 diseases and other risk factors that are often deadly if not properly treated. Then it enlisted hundreds of researchers across 195 countries to go out and count how many people died because of them. Finally, the researchers compared these numbers against the mortality rates that we would expect had these individuals been provided with proper medical care. The result is the 2016 Health Access and Quality Index.

Many of the results from the HAQ Index are predictable. The top 20 health care systems are all in fairly wealthy countries. Four out of the top ten are Scandinavian. Very few people in these countries die from things that modern medicine knows how to prevent or treat. 

Source: 2016 Health Access and Quality Index

But do you notice anything strange here? The United States isn’t even in the top 25. We come in 29^th, sandwiched between Czech Republic and Croatia. Despite the lower levels of public and private health care spending that we saw above, these countries–as well as Italy, Spain, and Greece–make stronger showings than the US by this measure. Once again, the Mediterranean countries punch above their weight.

Five risk factors dragged the US down most in these rankings:¹

• Kidney disease
• Heart disease
• Lower respiratory diseases like bronchitis, emphysema, and asthma
• Diabetes
• Neonatal disorders like premature birth 

These are all preventable or treatable conditions that Americans die from at far higher rates than we would expect had individuals received modern medical attention.

These are all preventable or treatable conditions that Americans die from because they lack access to medical care.

The United States throws more tax dollars at health care than any other country. And its citizens spend more of their private dollars on health care as well. Yet Americans don’t live as long as citizens in many other countries. This is in part because many of us lack access to quality health care.

So who does it better?

By the yardstick of average life expectancy, Japan stands out as the clear winner in this comparison. Even though they spend much less per person in terms of either public or private dollars, on average their citizens live more than four years longer than Americans do.

Honorable mentions also go out to several Mediterranean and Scandinavian countries. Sweden spends about as much per person as Japan on health care, Norway and Denmark considerably more, though still much less than Americans do. Perhaps most strikingly, Spain and Italy spend significantly less than all these other countries while still achieving comparable levels of life expectancy.

Lest you think that these impressive performances are the result of differences in Asian or European genetics, diet, or lifestyle, we saw that many of these countries are also ranked much higher in terms of health care access and quality compared to the United States. Again, despite considerably lower levels of public and private health care spending.

Whether you judge our system by life expectancy, or by underlying issues of access and quality, it turns out that America’s health care bargain is a pretty sick deal.

Whether you judge our system by life expectancy, or by the underlying issues of access and quality, it turns out that America’s health care bargain is a pretty sick deal.

What is driving these disappointing outcomes? In Part 4 of The Bargain we will put America’s health care system under the microscope, comparing it with 10 of the best in order to find out why we don’t get more health for our tax dollar.

1. According to the National Kidney Foundation, three of these conditions are highly intermingled. The two leading causes of kidney disease are high blood pressure and Type 2 diabetes.