Performance of the US Health Care System

Here’s some of the data I promised you the other day, giving a more detailed look at the performance of the US health care system compared with those of other industrialized countries.

First let’s take a look at the very young. How well does the US health care system take care of children and mothers, both before and after birth? The following table gives a few indicators:

Notes: Infant mortality rates from OECD, showing 2001 data; other data from the WHO, showing data for the year 2000.

The US does worst, or tied for worst, in every measure. The US health care system simply does not do a very good job in caring for the very young.

So how about the elderly? The following table gives details about the length and quality of life that senior citizens can receive in developed countries around the world.

Note: Data from year 2001. Source: WHO.

Not only is the US’s life expectancy at or near the bottom of the industrialized world, but Americans spend more of their shorter lives in poor health (as defined by the WHO).

Now recall the data I showed you the other day describing how much the US spends on health care. Americans spend nearly twice as much as people in other developed countries spend on health care. Our closest competitor for health care costs is Switzerland, which still spends just 60% of what the US spends, per capita. And yet all of these countries acheive better health outcomes: longer lives, fewer dead babies and children, and more quality of life for their elderly.

One last point: some have argued that the US’s poor showing on all of these measures is simply an artifact of demographic or other differences between the US and other developed nations, and not a function of the US’s health care system. It turns out that this is something that is fairly straightforward to determine using some econometrics.

One example is given in a 2003 OECD Working Paper titled “The US Health System: An Assessment and Prospective Directions for Reform,” by Elizabeth Docteur, Hannes Suppanz and Jaejoon Woo. They test the influence that various demographic indicators (e.g. income per capita, fertility, education levels, and income distribution) have on infant mortality and life expectancy statistics in a panel of OECD countries. Then they use those results to estimate how much of the US’s poor results simply reflect these demographic characteristics, and how much are unexplained.

They find that such demographic factors do not explain any of the US’s bad health statistics. (The US’s low level of publicly provided health care does explain about one-third of the US’s low life expectancy, however.) The conclusion is that there is something idiosyncratic about the US health care system that results in poor outcomes despite its enormous costs. The average American simply receives unambiguously worse health care while paying twice as much as citizens of the rest of the developed world.

Kash