• Why it’s time to panic

    Well, I’m just having too much fun with my new OECD data access.  I am trying to focus on getting the series on quality done.  But here’s something I just whipped up which goes back to costs:

    What you are looking at is spending on health care as a percentage of GDP going back 30 years.  Lest you think I’m cherry picking, I’m showing you data from all 31 OECD countries.  It’s not hard to pick out the US line, is it?

    We should spend more money than other countries.  We’re richer than them.  But should we be spending so much more of our GDP on health care?

    Look at the slope of our line compared to every other line.  Yes, spending as a percentage of GDP is rising pretty much everywhere.  But it seems to be rising much faster in the US.  The gap between us and all other countries is just getting bigger.

    Is there anything about this chart that doesn’t make you worry?

    From Austin: There are two related posts today: (1) Aaron’s compendium of health spending vs. GDP regressions and (2) my counterpoint that describes how some economists think our health spending is optimal.

    • This is stupid. By this logic, the other OECD countries are paying too much of their GDP for everything that is not health care. [The US spends 9.8% of GDP on food, far less than any other country ever. Do all those countries have food crises? No.]

      The US, having generally freer markets, gets much of its non-health care, non-education products and services more and more cheaply from abroad. Health care and education can only be provided locally, so they don’t get much cheaper with globalization. They’re also labor intensive and so don’t get much cheaper with technology.* As a result, they take up more of GDP.

      If we suddenly got everything but healthcare free from aliens, health care would be 100% of GDP. We would still be better off than before.

      Percentage of GDP is a meaningless statistic. Please stop repeating this stat as if it means something.

      • Total nonsense buddy. The US has some of the most protectionist policies in the world. The White House preaches free trade but practices protectionism and hands out huge agricultural subsidies to farmers.

        They talk the talk but don’t walk the walk.

    • *To the technology point above: technology does, in fact, make health care a lot cheaper, but our accounting doesn’t notice it. 100 years ago, the price of a hip replacement was infinity: you couldn’t get it. Today, it’s a few thousand dollars. It’s literally infinitely cheaper because it’s possible, but because we suddenly spend money on hip replacements when in 1910 we didn’t, it shows up as more health care spending. The important part is that life is getting better. 1000 years ago, spending on computers and antibiotics was 0% of GDP. Life is better now that we spend some money on those things.

      • EricjakoE jake,

        We all agree we have better healthcare than we did 100 years ago. The article simply points out that compared to other wealthy nations we pay much more per GDP (it is the only way to compare country to country- it is a valid statistic.) and we don’t get better healthcare. The suggestion is there are probably ways to introduce efficiencies.

        Stating that the US pays vastly less of GDP on food is a stray man argument and a distraction. We have an efficient food production system that is partly the beneficiary of subsidies.

        I don’t want to explore this point too much but I think US doctors are probably the highest paid in the world, for example, there are a significant number of surgeons making millions per year! Perhaps contributing to this, our MD’s typically exit medical school with 100’s of thousands of dollars of debt. In Europe if you can get into a medical program you pay nothing. This is a tangential point and not at the heart of the inefficiency but it is something to think about.

        We need to do something about the cost of health care because the cost of healthcare has grown much faster than the rate of inflation, the country is aging, and they will expect medical entitlements we can not afford to pay. Something needs to be done. Special interest and doctors are going to fight to keep things as they are, they stand to lose a little of their high standard of living otherwise.

    • HH: you make some nice points, but if you look at this in combination with the graphs in the first link (per capita expenditure vs GDP), I think this is a fair way to look at a trend over time. Of course we also need to look at health care quality and health outcomes – my recollection is that the US does not do particularly well on typical measures. Who knows, maybe we eat too much cheap food that’s no good for us, and we spend more on health care to make up for it.

    • @NF:
      Paradoxically, the unhealthy dietary (and other life style) habits of Americans is *reducing* health care expenditure and is the only thing standing between us and fiscal ruin.
      If Americans lived as long as Scandinavians, or worse, Japanese, there would be more than double as many 85+ seniors, the age group that by far consumes the most health care.
      Cardiovascular disease, the cause of death most closely associated with sedentary life and Western cuisine, knocks off a lot of recently retired people in a relatively cheap manner when compared to Alzheimer’s or general wasting.
      Health care spending could already be at 30% of GDP if our age composition matched that of our fellow OECD members’.

    • Maybe healthcare is a high percentage of American GDP partly because of all the Canadians and Europeans who come to America in order to get actually decent and unrationed health care, thus contributing to American GDP and American healthcare “costs.”

      Like the Premier of Newfoundland who came to the US for heart surgery

    • 1. I think that you will see a similar thing if you look at per pupil spending on schools. (http://www.gnxp.com/wp/economics/is-healthcare-expensive)

      2. To me it looks like health care spending is rising just as fast as a percentage of spending in the other countries.

      3. Also notice that we have always spent more on health care.

      Also I have said this before but most things are cheaper in the USA

    • @HH

      “Health care and education can only be provided locally, so they don’t get much cheaper with globalization. ”

      I think this is false. Health care and education can easily be provided non locally. Some insurance companies are flying patients to other countries where health care is cheaper. So non emergency health care is becoming more globally competitive.

      Education is resisting viruatlization, but with virtual education improving, i.e. the Khan academy. Although it’s not accredited, doesn’t mean that it doesn’t have value. Internet courses are definitely catching on.

    • @Rob

      I didn’t have time for details. You’re obviously right that globalization reduces costs in these two areas, but relatively little. In education, it’s because of credentialing: foreign professional degrees, for example, are afforded little credit here. For health care, travel costs still limit the spread of medical tourism. Of course costs fall because of these things, but not nearly on the scale that, for example, foreign production of manufactured goods and parts, or services like call centers and tech support and document handling lower prices for consumers in these areas. Hence, relative to these areas, healthcare and education end up taking up more of GDP.

    • Healthcare is (becoming?) a normal good. The US consumes more because it has a higher disposable income. The euro countries would spend more but are constrained by 1 government substitution ( the gvt will pay for my healthcare) and 2 lower incomes due to high taxes.

    • @Memnon

      However, two economists have argued in a recent book that life expectancy is a lousy way to compare two countries. Murders, suicides and accidents can have a big effect on life-expectancy stats because their victims die younger, on average, than victims of disease. And, they argue, the health-care system can’t do much to prevent those kinds of deaths. After adjusting for those kinds of deaths, the U.S. ranks at or near the top of developed nations in life expectancy, health economists Robert Ohsfeldt (of the Texas A&M Health Science Center) and John Schneider (of Health Economics Consulting Group LLC) write in “The Business of Health,” a 2006 book published by the conservative American Enterprise Institute think tank.


      The effects of poor nutrition and obesity (see CDC study) are grossly oversold as causes of premature death.

    • Memnon:
      re aging of society: all things being equal, with age and increased prevalence of cognitive impairment and need for supportive services, we will also get adaptations and innovations in geriatric care–like cardiac and orthopedic services of the latter part of 20th century.

      Largely under the radar, I am blown away by some community models and programs that promote home independence. Recently, the WSJ profiled a home system, not unlike telemonitoring in ICU’s, to watch over a senior’s household. Neighborhood “edlder” coops as well are a growing trend, and very successful. Regardless, this will change the cost quotient of eldercare.

      You are probably familiar with the term QALY. There is also HALE (health-adjusted life expectancy), which can be used to assess whether increases in longevity are accompanied by compression of morbidity. We cannot underestimate above and how advances in care and medicine, hopefully with efficiencies of cost, will allow the aging of society to progress without busting the bank and driving NHE/GDP through the roof. That is the unknown.

      If I am wrong, well, hopefully I wont be around to see it…in my wheelchair and diaper.


    • We broke from the pack in the early ’80’s, when managed care was getting up a full head of steam. I’ve long thought that managed care was the real culprit. Just a middleman taking its cut and adding very little to the market.

    • @LZ:

      Decent, unrationed health care? Where do you get your information about health care? Dr. Hannity or Dr. Cavuto?

      Like every other country on this planet MUST have horrible health care compared to here.

      Come on! Please bring a more substantive contribution to the discussion…please! Conservative propaganda has numerous homes on the Internet. This site is not one of those.

    • To further the discussion about this topic, consider the change in survival rates in the US versus other countries.


      Sorry to say that we are sliding backward. Moreover, the usual excuses (smoking, obesity, firearms and traffic related deaths) were controlled and accounted for in this study linked above.

      Bottom line is clear: these 4 factors do NOT explain the trend toward degradation of survival in the US.

      And that’s not good at all. We have rising costs and decreased survival rate. It’s kind of time to stop invoking vapid and slothful belief-driven propaganda and start THINKING seriously here.

    • According to this site


      the US ranked 12th in life expectancy in 1978, the first year of the above chart. In 2005 the US ranked 34th. Don’t know how accurate their numbers are but all studies I’ve seen show similar results. And granted healthcare is not the only factor in life expectancy but it is a big one and as Dr Frankie noted recent studies show the difference is not driven by smoking, obesity, firearms and traffic deaths, The high US infant mortality rate relative to other wealthy countries is probably a big factor. Adding a year or two survival relative to other countries to cancer patients is a wonderful thing but it doesn’t have the same impact on life expectancy as a kid who dies at 3 months. But then a lot of the people who think US healthcare is so superior don’t really care about the poor people’s babies who are doing most of the dying anyway.

      Almost all studies show that despite spending much more and cost increases that are consistently much greater than other countries the US isn’t actually any better at it than them. Yes, we do some things quite well compared to them, but overall we don’t really have much to show for all that extra money. Hard for me to believe that any informed person with a lick of sense and objectivity can think otherwise. Even worse, if the US per capita healthcare costs were that of any one of the countries that has a higher life expectancy, our deficit problem would virtually disappear.

    • Can you break the data down further? I would like to see trends like this for the various categories of “health care.” An aggregate trend like this, though stark, does not tell me much if I am looking to be as efficient and effective as possible at rolling back “health care” spending. Also, though it is nice looking at this data over time, I would also be interested in their relationship to health care outcomes. For some things, spending more is better, but that story gets buried in this graphic.

    • You’re not taking into consideration all the extra Freeeeeeeeedom! that extra money buys.

    • “Is there anything about this chart that doesn’t make you worry?”

      Yes. The percentage stayed level during the Clinton years. What were we doing right, then? Especially by comparison with the Reagan and Bush I years, when we pulled away from the pack?

      • @Min – Managed care. Consumers and physicians hated it. There was a backlash and it is unlikely to work again.

      • Old post, but I thought I would make a reply to this comment. The relatively flat line during the Clinton years is probably due to the value of the dollar during that time. Clinton had a strong dollar strategy, by that I mean the dollar would buy more things in Canada, for example, than the Canadian dollar would buy in the United States.

        This is in contrast to the Bush and Obama years which have very weak dollar strategy. A strong dollar means that imported goods are cheaper, but it also means a larger trade deficit as American goods are more expensive in other countries.

        A good way to look at inflation is to just look at the price of gold. While not a good investment it is a good hedge on the rate of inflation.

        Compare the last decade of history and see the drastic devaluation of the dollar.

        I would like to see the confidence intervals on the graphs too but most people forget these.

    • @HH
      You said “The US, having generally freer markets, gets much of its non-health care, non-education products and services more and more cheaply from abroad”
      Maybe food is more expensive in Norway, but all 31 OECD countries?
      Cross the border into Canada, and you will find a country with equally free markets, and with the same Walmarts and the same prices. Oh, and the soda pop has actual sugar because we don’t restrict trade in sugar.
      You said “Percentage of GDP is a meaningless statistic. Please stop repeating this stat as if it means something.”
      Ok, lets change the measure from a more abstract to a more concrete reality and see if the situation gets better or worse for the US.
      So, going from percent GDP to Dollars per citizen for health care the chart would get worse, since the US is somewhat richer than the rest of the OECD,
      Okay, more concrete, how about dollars spent versus results. Dollars spent versus life expectancy…oh, the gap widens, since most OECD countries have a longer lifespan, same with less infant mortality, and many other measures of health.
      Or, how about this statistic, Dollars given by citizen per year that goes to profit health care providers per year. The gap widens again
      because many (not all) OECD countries don’t have private companies as middlemen in healthcare, and those that do regulate them more.
      Oh, and most concrete statistic would be, out of pocket costs for healthcare. Let’s see, when my son was born, the whole stay in the hospital cost us $24. What is the typical cost in your country?
      Dear HH, What statistic or comparison would you need to see before you admitted the US has a problem?

    • The U.S. also does worse on survival rates after diagnosis of major diseases, which seems pretty directly related to healthcare quality.

      France, Germany, and Japan spend a lot less per GDP and per capita, with better stats and high customer satisfaction. They pay their doctors a lot less, but it doesn’t seem to adversely affect quality.

      What they have in common: private non-profit insurance, a mandate to buy it, no exclusions of pre-existing conditions, no claim denials allowed, and a national price list for all services. If the doctor says you need it and it’s on the price list, you get it, period, and he gets his money promptly. Since he doesn’t have to fight with insurance, and they also have good electronic medical records systems, they have a lot less need for administrative staff. The list of covered services is at least as broad as you get on American plans, and probably more so in Germany.

      Source for all that: The Healing of America by T.R. Reid.

    • We’d do a lot better if we used electronic medical records, like many other countries do. We can do that relatively cheaply. The V.A. has developed a top-notch system and released it as an opensource project anyone can use. Several countries are using it now for their national systems. It wasn’t an official project with expensive contractors, it was a grassroots collaborative effort by the doctors and interns at the V.A., and fits doctors’ needs very well.

      An example of what it does: You may have heard about medication errors in hospitals. At the V.A., every medicine bottle, patient, and nurse has a barcode. When a nurse delivers meds, she scans all three, and the system alerts her if they don’t match up right. If she’s late delivering, that shows up in a report to her boss.

      Source: Best Care Anywhere by Phillip Longman.

    • @LZ:

      Sorry, but the US has a rationed system. It is called the price mechanism that rations how scarce resources are allocated. The whole argument regarding rationing is bogus; it is built on the fact that the average American does not understand market based economies.

    • @Xalem – let’s take these in order.

      Actually, even in Canada the percentage of income spent on food is about 40% higher than in the US. Consequently, the Canadian share of income spent on everything else is lower than in the US.

      Dollars spent per health care isn’t a particularly meaningful statistic without outcomes. Didn’t we just show that Canada spends more on food. Does that mean anything without knowing about the quality of food?

      Life expectancy is a terrible, terrible measure of the health care system. Do you think the current life expectancy in Iraq is a good measure of their doctors? America has five times the murder rate of Germany: an indictment of the society, perhaps, but surely not of its doctors. I’d argue that given America’s different demographics, it’s almost impossible to compare its medical quality against the rest of the world, though I’d also argue the evidence is that for the state-of-the-art procedures the US is the place to be.

      “Dollars out of pocket” might be a nice measure for you, personally, but it says nothing about actual resources consumed. If you pay 24 and your insurance pays ten times that, it’s nice for you but as a society, we’ve still used up $264 worth of resources. And since we’re looking at societal costs, a person’s out of pocket costs mean nothing.

      All that said, I never denied that the US health care system has significant problems. It does, no doubt. A litigious culture probably increases defensive medicine. Piecemeal regulations destroy the ability to rein in costs for those who have the incentive (insurance cos) and destroy competition among providers. There is virtually zero transparency in medicine – try to find the price of a procedure at some point, it’s almost impossible. There are quite a few changes I’d make to the US health care system (and a few are mentioned in these very comments) but showing spending as a percentage of GDP is at best meaningless and at worst misleading. I’d like the argument to be done on merits if we’re going to have it. Otherwise, look at the chart at the link I pasted above and let’s talk about the food spending crisis in France.

    • @Charles,

      Yes, I guess technically you could say the market rations good, but only if you wanted to rob the word “ration” of all its meaning. Scarce resources have to be divvied up, of course, but saying the market mechanism is rationing when the latter, to most people, implies a central power distributing according to some rule or even arbitrarily, just confuses the discussion. There is no “market brain” deciding who gets what, and calling “voluntary exchange” rationing is just misleading.

    • “One of these things is not like the others.”

      Yes, and one of these countries has (i) a parasitic politically invulnerable industry that gets its “vig” or “protection money” by standing in between health care consumers and health care providers; who constitute the leading cause of bankruptcy in the deviant country, while paying its executives 8-digit bonuses; creates the greatest amount of unfathomable paperwork confusion since the invention of the internal revenue code, is universally despised by its customers, while denying life-saving treatments on a whim, based on punishing the sickest; (ii) and this same country shares unprecedented political power by employing armies of lobbyists and who constitute the largest contributor to political campaigns of any industry, who routinely bribe healthcare providers by providing a steady stream of big perks for prescribing their products, and charges its home country twice what it charges the rest of the world for its products, and is so politically protected that it has convinced the country’s government that it should be illegal for citizens of their home country to order their products from overseas at the half-price discounted rates for their products which are sold overseas, and even across the boundaries of an adjacent country who constitutes the country’s largest trading partner and who is give unlimited free trade status for every other product.

      So this country, who is not like the others, finally declared ENOUGH, and attempted to pass a law that would reign in such excessive costs, only to arrive at a final product that basically exempts industry (i) and industry (ii) from suffering any pain that could be imposed by curbing waste, abuse, overcharging its customers, preventing sick people from receiving medical care while cherry-picking its customers so that the only ones who can benefit from their products are the same people who don’t need them.


    • @HH

      “This is stupid. By this logic, the other OECD countries are paying too much of their GDP for everything that is not health care. [The US spends 9.8% of GDP on food, far less than any other country ever. Do all those countries have food crises? No.]…”

      I don’t follow your “logic” here. You argue that health care in the US is a larger percentage of GDP simply because the cost of everything else in the US – as a % of GDP – is relatively small? Using that logic, couldn’t you just as easily say “The cost of food in the US as a percentage of GDP is low compared to other countries because we spend a much higher percentage of our GDP on health care” ? Talk about “meaningless” arguments.

      In one breath you imply that other countries spend much lower percentage of their GDP on healthcare because they spend much more on everything else, but then go on to state that “[t]he US, having generally freer markets, gets much of its non-health care, non-education products and services more and more cheaply from abroad.” So which is it – are products from abroad generally cheaper or more expensive? You seem to want it both ways. (to say nothing of the fact that GDP measures value of goods and services produced within a nation’s borders, and thus has nothing to do with what is paid for imported items – and in several places you seem to imply that % of individual income is somewhat analogous to % of GDP…)

      You dismiss the % of GDP argument out of hand as meaningless, yet you didn’t adequately address Xalem’s points that by virtually every other measure of cost, the US spends much more than other industrialized countries for very similar (or sometimes worse) outcomes in most areas. Indeed, Xalem makes a very good point that comparing US health care expenditures to other countries by looking at it as a % of GDP casts the US in more favorable light than any other method of cost comparison. As absolute cost per capita, or even as % of federal spending, the heath care cost disparity between the US and other industrialized countries is even larger. (yes, even though other industrialized countries have some form of national health or national health insurance system, they spend a smaller percentage of their government budgets of health care than the US does, which does not have a national health care system… this despite that fact that the US govt dumps nearly a trillion a year on the military ).

      Again, what measure would you use, HH, if % of GDP is not a good way to compare health care costs? At this point you imply that our system costs more because it is better, and because of demographics and litigation. In other words, you offer the standard self-serving Republican/corporate talking points that have been debunked over and over.

    • @pinche

      “I don’t follow your “logic” here. You argue that health care in the US is a larger percentage of GDP simply because the cost of everything else in the US – as a % of GDP – is relatively small? Using that logic, couldn’t you just as easily say “The cost of food in the US as a percentage of GDP is low compared to other countries because we spend a much higher percentage of our GDP on health care” ? Talk about “meaningless” arguments.”

      Thanks for making my point. You can look at these things and concoct several explanations that fit. That means that the stat explains nothing. I can’t prove from that stat either way whether Americans pay too much for health care or the rest of the OECD pays too much for other things. Which is why using this stat is pointless.

      “So which is it – are products from abroad generally cheaper or more expensive?”

      Cheaper. The OECD generally doesn’t overlap with the countries the US imports manufactured goods from. SE Asian countries aren’t represented in the OECD, generally, and I bet we get more of our goods from there than Germany does.

      “Again, what measure would you use, HH, if % of GDP is not a good way to compare health care costs? At this point you imply that our system costs more because it is better, and because of demographics and litigation.”

      I don’t think there’s a single particular stat that tells you there’s a problem. The things I mentioned contribute to differences, but even without them, there’s a basic difference between US and the rest: both groups have mostly third-party payers of medical costs, but the US doesn’t have cost-control. I happen to think that cost-control has been proven as a killer of innovation – in fact, the rest of the world is free-riding on the US pharma and medical innovation markets. I’d hate to see cost-control instituted here because I think it would destroy far more in future value than it would save us now. Of course, I’d also like to change medical insurance from a pre-paid service plan to true insurance, but in any case, as the biggest market, as long as innovation happens here and the rest of the world benefits, we’ll probably always have a disconnect between us and the OECD.

      We can have the cost-control discussion if you’d like, but this thread isn’t the place for it.

    • Just to throw some more wood on the fire. In the USA of the ethnic groups normally tracked Hispanics have the least access to health care and the live longer than whites (who have much more access). Hispanics also have lower than average infant mortality, along with bigger babies and fewer multiple births. Asians have the lowest infant mortality and lowest multiple births.

      And geographically according to the Eight Americas study, rural northern rural whites have below average access to health care


      [Interesting this study shows that int the USA latinos, who of the groups studied have the least access to health care outlive whites.  Even more interestingly latinos in the USA out live most Europeans.

      Add to that the fact that the eight Americas study shows that rural northern whites (with less access to health care) out live the general population and you begin to wonder if access to more health care shortens life!

      Of course remember that homicide and accidental deaths move the life expectancy averages more than health care, beyond vaccinations,

      On the other hand over the counter meds like aspirin/Tylenol and antibiotics can also save lives. ]

    • I’ll try to keep this brief and address this in no particular order.

      1. Re Trading partners: Canada mostly sends natural resources to the US. The US generally imports much more in manufactured goods than other OECD countries. In any case, there’s little doubt that even at PPP goods and most services are cheaper in the US.

      2. I’m not defending the status quo, so the fact that US law prohibits X to negotiate for prices with Y when they probably should be allowed to do so just tells me that the last people to be entrusted with running health care are politicians.

      3. Regardless of where medical innovation happens (Novartis does most of their research in Jersey, for example) don’t you think it matters that the US is a big and well-paying market? Saying that innovation happens abroad so it doesn’t matter what we do is like saying that our demand for manufactured goods has no effect on manufacturing in China.

      4. I’m not aware that pharma companies have higher firm-wide profits than your average firm, though I’m not surprised given patent protections (a whole another discussion).

      5. As for pharma development, I find the role of the NIH pretty important.. I also find the role of big pharma very important – the professor may identify the gene or the molecule. Taking it from there to a usable and cheap product that isn’t poisonous, isn’t an IV, and can survive odious FDA trials involves a myriad steps that academia isn’t equipped to do. I don’t denigrate public basic research, but I also maintain it wouldn’t get us very far without the applied science of for-profits.

      6. I haven’t complained about wait times, though I’d give the US a small advantage on those. (Especially compared to Canada and the UK’s hated NIH.) I’d also rate the US better on the availability of certain things that some state-run systems simply don’t allow.

      7. The fact that health care someplace is publicly funded, vs by employer in the US, has no bearing on production costs. Krugman proved this ages ago: for an employer, the cost of the employee is total compensation. In the US, that means [health benefits plus wage]. In Canada, that just means [wage]. The more costly health benefits, the lower the wage of the worker, but the employer’s total outlays remain the same.

      8. http://www.scottwinship.com/1/post/2009/07/that-veterinarian-services-vs-health-spending-chart.html
      Pretty good evidence that the biggest chunk of the higher spending is simply that we’re getting richer and we want to have more health care.

      9. A good point was raiser earlier: most health care spending is wasteful and even damaging. Unfortunately, that’s not what you think when you or your child sick.

      10. Percentage of GDP is still a pointless stat. Any number that give you a worse score if all your food is suddenly free and better if you become a cost-controlling police-state has no bearing on this discussion. We’ve been dealing with the real issues in this thread. Let’s stick with that.

    • @HH

      thanks for responses. Unfortunately, my post that you were responding appears to have been deleted. Pity that.

    • Can we all agree that the costs for the individual are going up and that with government/ HMO / Insurance payouts remaining flat or not keeping pace with rising costs, the individual is paying more for the the same or less health care? Can we also agree that this allows for less disposable income at a time when incomes are flat or declining or disappearing? Can we also agree that Health Care as an industry is not unlike the energy, mortgage, finance, etc. industry and that when not watched they will increase costs to their customers through oligopolic collusion? This is thre real issue here on both the Macro and Micro level. In the 1950’s there were more ways to find capital, but consolidation has made it harder for the investor to find. Insurance companies that formerly had to compete were squeezed out of markets by HMO’s who can now set their prices instead of taking them. And Government does nothing. The individual result is that the individual is getting further and harder squeezed in favor of the corporate entity.

    • If a hip replacement is intimately more expensive than a few years ago because it didn’t exist then, it might increase spending as a percentage of gdp, but it would increase the spending/gdp of all countries equally. U.S. Shouldn’t be separating from the pack. And if foreign good are cheaper and technology is cheaper then our hospitals are spending less on equipment

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    • I would be very interested in seeing a breakdown of the money we spend as a percentage of our health care costs on pharmaceuticals vs procedures. Also a comparison of other countries spending would be very enlightening.

      The majority of the world heavily regulates the pricing of pharmaceuticals, whereas the US does not. Is this forcing US consumers to pay for the expensive R&D cost of drugs that are being sold all over the world. If so, is this one of the driving factors behind the high health care spending we have in the US?

      The next question would be, if we socialized health care what would the impact be on the rate of new medical technology and drugs being developed, both for the US and through dissemination, the world.

      My sense is that, being the last non-socialized major medical market in the world, the US is paying for a significant portion of the Medical R&D that the world is taking advantage of. I would be interested in seeing any data that supports or denies that.

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