Ezra Klein, of the Washington Post, writes about an Organization for Economic Cooperation and Development (OECD) report as follows:
“And here’s the shocker: Our government spends more on health care than the governments of Japan, Australia, Norway, the United Kingdom, Spain, Italy, Canada or Switzerland.”
Here is the slide that has so impressed him—
Yes, indeed, our government spends more than many other governments on health care. But, wait, there’s more—
“And it’s worse than that: Atop our giant government health-care sector, we have an even more giant private health-care sector. Altogether, we’re spending about 16 percent of the GDP on health care. No other country even tops 12 percent. Which means we’ve got the worst of both worlds: huge government and high costs.”
Then he adds,
“This is where a “serious conversation” on health-care costs would start—with what has worked, and what we can learn from it. Instead, it’s where our conversation about health-care costs never quite goes.”
Good idea. Let’s have that conversation.
Let’s begin with the idea that private expenditures are voluntary. Mr. Klein seems to share the view that spending money on health care is bad, and the more we spend the worse it is. This has always been a puzzling attitude. I have never been sure what they would rather we spend the money on. Potato chips? Fancier houses? More stylish clothing?
If Mr. Klein were better informed about the OECD, he might have come across another graph they published—
As the graph shows, one of the unique characteristics of American health care is that we spend so little out-of-pocket as a percentage of total spending. Americans spend only 13% of our total health care spending directly out-of-pocket, as compared to an OECD average of 20%. We spend a smaller portion directly than Canadians (15%), the Swiss (31%), the Italians (20%), the Belgians (22%), the Australians (20%), the Japanese (17%) and many others. In fact, the only countries that spend less than we do are France (7%), Luxembourg (7%), and the Netherlands (8%).
Mr. Klein might then want to consider that part of the reason we have more health care inflation than many other countries is because we spend so little of it directly. Most Americans have no idea what their consumption decisions actually cost. It might come as a shock to Mr. Klein, but people tend to consume more when someone else is paying the bill.
We have remedies for that, but most critics of the US system seem to believe it is mean-spirited to expect people to pay a portion of what they consume—unless, of course, they live in some other country.