Some other issues with comparing US healthcare costs and so-called “outcomes”

Besides my previously mentioned objections with simplistic comparisons between healthcare systems, vis-a-vis naive economic comparisons and the effect of taxation on behaviors, it is very difficult to compare the actual performance of healthcare systems, in both financial and human terms (e.g., life expectancy, mortality rates, etc), without accounting for other differences in the populations (e.g., genetics, health/risk behaviors, lifestyle, etc).   These simplistic comparisons of national health care systems based on crude mortality rates and the like are very much like comparing performance of goalies in various sports based on who wins the game alone, i.e., without making any real attempt to control for the performance of the rest of the teams’ defense, the performance of the offense, and so on, when what we really want to know, at bare minimum, is the number of saves as compared the number of shots on goal (and even then that’s an imperfect metric).  Of course some goalies are likely to be somewhat more effective than others and, other things equal, goalies can have a pronounced impact on the outcomes, but you cannot simply assume that there are not any significant systematic differences between teams in general or on game day.

These are just a few relevant differences I can think of off the top of my head:

  • The United States population is not a mirror image of Europe: genetically, culturally, or otherwise
  • Much higher smoking rates historically
  • Relatively high rates of obesity (although other countries are starting to catch up to us now)
  • Much higher homicide rate.
  • Higher rates of sexually transmitted diseases (see the AIDS crisis)
  • More geographically distributed than most (as in, lower population density, significant populations living in rural locations, etc)
  • Higher rates of serious automobile accidents per capita

….. (and probably more I’m forgetting)

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United States taxation compared to various European countries

It is well established that the United States has a much lower average tax burden than Europe (broadly).

Tax Revenue as Percentage of GDP OECD comparison

source: OECD Tax Database

However, some people seem to believe that ordinary people in Europe do not actually have to pay much higher taxes and that somehow (illogically) these countries with presumably lower income inequality are able to generate all of this tax revenue to pay for all this “free” stuff by just taxing the top 5% or some such.  This is complete nonsense!  These European countries generate this revenue, in the main, with a much broader tax base, both income and social security taxes (and consumption taxes to lesser extent).

Below are a bunch of graphs and figures produced from the OECD’s estimates from the statutory tax code (note: these are particularly sensitive to assumptions made)

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National Healthcare Expenditure: United States versus Other Countries: The US is not really an outlier.

UPDATE (9/25/2016): I just created a new and (hopefully) much improved version of this argument here.  I suggest you start there instead.

Numerous people have asserted that the United States spends dramatically more on healthcare than other countries, presumably even more than countries of our level of wealth and affluence, and that this can only be explained by the fact that we do not have single-payer or some such.

Here are some examples graphs used to make this point

Above-expected-500x406 (1)


These appear to be very convincing at first blush, but i never found these arguments particularly convincing due primarily to:

  1. Imperfect comparability between the selected countries
  2. Issues relating to comparing countries of the “same” GDP
  3. cherry-picking of countries

I knew the proponents of single-payer were, at best, making an incomplete argument and that it invited an exaggerated impression of what we should likely expect from a country like ours, but, up until now, I lacked the data and the time to present these argument comprehensively.  I recently got in an argument with someone over this subject and found a treasure trove of data all in one place (mostly) to thoroughly debunk this overly simplistic argument.

To make my points, vis-a-vis fundamental issues with naive treatment of GDP per capita and sensitivity to comparison countries, here is a quick chart showing National Healthcare Expenditure (NHE) as a percent of GDP by GDP per capita



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