Posts Tagged ‘OECD health expenditures’

Be Careful What You Wish For

July 28, 2009

Think quick!  You have a health issue –  in which set of 5 countries would you rather be treated?

Choice A:    Turkey, Mexico, Korea, Poland, Slovak Republic

Choice B:    United States, Switzerland, France, Germany, Austria

The first set of countries represent, in order, those OECD (Organisation for Economic Co-Operation and Devlopment) nations that spend the least on health as a percentage of GDP.  The second set of countries represents, in order, those OECD nations that spend the most on  health as a percent of GDP.  I used 2005 numbers as that is the most recent containing data for all the tracked economies.  (More data can be found here)

Critics of the U.S. system often point to how much we spend on healthcare.  However, this is clearly an inadequate measure.   Greg Mankiw’s blog has pointed to academic work that suggests that higher spending on healthcare is a rational response to higher income.   In his article in the current edition of “City Journal,” physician and Manhattan Institute fellow, David Gratzer, points out the flaws in thinking that, “a dollar spent is a dollar wasted.”

I’m not sure that, as a society, we’ve even achieved any kind of reasonable consensus for we want from our health system.  It is very difficult to make major changes in this system without understanding the end game.  As the above list of countries highlights, simply seeking to lower health expenditure as a percent of GDP may sound appealing, but probably isn’t what we’re really seeking.