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Affluent Investor | July 22, 2017

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The U.S. Spends More Public Money on Healthcare Than Sweden or Canada

Sticker Shock

THE U.S. SPENDS MORE PUBLIC MONEY ON HEALTHCARE THAN SWEDEN OR CANADA

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

The underlying challenges in fixing U.S. healthcare may be multi-faceted and complex, but the overall diagnosis is clear: costs are out of control.

According to a 2015 health report using data from the Organization for Economic Co-operation and Development (OECD), per capita spending on private healthcare in the U.S. is $4,516 per year.

That’s 5x higher than that of the median OECD country, which pays $806 per year.

Of course, the high cost of private care makes sense, because the U.S. has a system that largely revolves around the private sector. If companies and individuals are covering most of their healthcare expenses, then public expenditures should be extremely low, right?

Here’s the kicker. The U.S. spends more public money on healthcare per capita than Canada, Sweden, Denmark, Germany, Switzerland, France, Japan, Australia, New Zealand, and the United Kingdom. In fact, each year the U.S. government spends $4,197 per person, while the OECD median spend is $3,677.

In other words, costs seem to be out of whack across the board in the United States, regardless of whether it is private or public care being discussed. Further, the above numbers are from before the recent double-digit hikes in premiums for most states under Obamacare.

NO BANG FOR THE BUCK

Combine public and private together, and it totals to 17.5% of GDP being spent on healthcare in 2015. This number is as high as it has ever been, and it dwarfs expenditures in other countries around the world.

Here’s another look at the problem, this time with costs charted against life expectancy – something we previously posted last year.

Courtesy of: Our World in Data

Spending keeps rising, but the effect of that spending seems to have decreasing marginal returns on life expectancy – a metric that is an important indicator for the overall effectiveness of any health system.

It’s clear that Americans aren’t getting bang for their buck when it comes to medical treatment – so how is it to be fixed?

 

Originally published on Visual Capitalist.

Visual Capitalist creates and curates enriched visual content focused on emerging trends in business and investing. Founded in 2011 in Vancouver and reaching millions of investors each year, Visual Capitalist’s work has been featured in The Wall Street Journal, Gizmodo, The New York Times, Maclean’s, The Vancouver Sun, and Business Insider.

 

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