Despite the fact that the United States is the only industrialized nation that does not ensure that all its citizens have health care coverage, the United States spends a (much) higher percentage of its gross domestic product on health care than its peers. It also spends (much) more per person on health care than its peers.
But that hasn’t always been the case.
The Organization for Economic Cooperation and Development recently released updated historical statistics on health care, showing that health expenditures have risen drastically across the industrialized world.
As demonstrated by the mass of squiggles in the chart above, the United States has generally been at the high end of health care spending. But once upon a time, it was more or less on par with its peers, and at various points even spent less of its G.D.P. on health care than some other countries (namely, Canada, Sweden, Denmark and Germany).
There were also a few years when it wasn’t the biggest spender per capita on health care, in purchasing power parity terms.
Although you could quibble about the exact trajectories, it seems to have been in the late 1970s or early 1980s that America’s health care spending really broke from the pack.
Since 1980, the portion of G.D.P. that America spends on health care has risen by about 7 percentage points, whereas the average for other Organization for Economic Cooperation and Development countries has risen by 2.3 percentage points. Health expenditures per capita in the United States have likewise more than tripled since 1980, adjusting for inflation. The average for the rest of the member countries, where data are available, has more than doubled.
The US spends 16 percent of GDP versus 6 to 11 percent in other countries. That means the citizens in other countries are spending 5 to 10 percent more on something than US citizens, since in all countries total GDP must equal 100 percent.
Maybe it is a question of individual, cultural and national priorities. What items in the other countries are larger shares of GDP than in the US? Maybe we just spend less on those items and are voluntarily willing to spend our extra funds differently. Maybe in the other countries there are no available funds to spend more on health care and they would if they could.
Every household and every country spend its funds differently. Why do we all need to be the same. Spending more on health care also means we spend less as a percent of GDP on some other item. It is budgeting and there are no right or wrong budgets as long as all the bills are paid, there is food on the table and the kids are clothed.
— Milton Recht1980. The Reagan revolution. Let free enterprise reign, and it did. Non-profit health insurance providers became for-profit health insurance providers. The growing gap from the everyone else is simply the profit margin of these companies.
It makes sense that the US was on the top end in terms of expenditures – after all, we were (not necessarily are now) the technology and research leader. We led the war on cancer. We led in vaccination research. We led in the pioneering of many new surgical techniques.
It is no surprise that the Reagan revolution was a way for profiteers wearing the flag of “free enterprise” to rob the cookie jar. They did – we the stupid consumers pay, and pay, and pay. Because it’s not about healthcare or research or technology – it’s about gross profit.
And nothing is more American than that.
— Lynne
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