Health-Care Spending Growth Around the World
Observers don't get very excited about the fact that China's economic growth is frequently three or four times what America enjoys. It doesn't mean that China's economy is three or four times better, or its model is somehow desirable. Rather, it's in large part the function of having a low denominator. China's economy is much smaller than ours, which means it has a lot more room to grow, and each dollar of expansion is larger in percent terms than it would be in the American economy.
So too with this Business Week graph showing health-care cost growth around the world. The author is quite surprised that the U.K.'s spending growth outpaces ours. But of course it does. The U.K. spends $2,992 per person. The U.S. spends $7,290 per person. To put this in real terms, the U.S.'s 5.8 percent growth works out to a $422 increase per person. The U.K.'s 6.9 percent growth is a $206 increase per person. Which would you prefer? Moreover, the U.K.'s system is underfunded, and in recent years, the British government has been trying to increase spending. That's not true with the American system, which is overfunded (although in recent years, the government has also been increasing spending).
What actually surprised me about the graph is that France and Canada and Germany and Sweden have significantly slower spending growth than we do, even as they spend much less than we do -- in some cases, less than half as much per person. That suggests their systems are both less costly and much more resistant to cost inflation. Long-term, they'll have problems if growth doesn't slow, but their long-term is much, much, further out than our long-term.
Posted by: DaveoftheCoonties | September 15, 2009 11:20 AM | Report abuse
Posted by: AScharf | September 15, 2009 1:02 PM | Report abuse
Posted by: mcgreivy | September 15, 2009 1:08 PM | Report abuse
Posted by: seerrees | September 15, 2009 2:19 PM | Report abuse
Posted by: seerrees | September 15, 2009 2:22 PM | Report abuse
Posted by: wisewon | September 15, 2009 4:00 PM | Report abuse
The comments to this entry are closed.