During calendar year 2000, national health spending for the United States
will exceed 1.3 trillion dollars. ¹ That's $1,300,000,000,000. This figure
represents roughly 13.6 percent of the Gross Domestic Product (GDP),
up from 5.7 percent in 1965, and from 8.9 percent in 1980.

Compared with other developed countries around the world, America
spends heavily on health care, yet seems to get less for it. No other nation
spends more than 10 percent of its Gross Domestic Product on health
care. ( Canada comes in second, at 9.1 percent.) Americans fare little bet-
ter, if at all, for all their extra spending. Even Japan, the United Kingdom,
and Denmark--which spend less than half as much on health care (as a
percentage of GDP)--show better health outcomes.

When compared against other developed market economies, using a
broad range of macro-level health-outcome indicators, Americans seem
to be doing well below average. ² According to the World Health Organi-
zation (WHO), out of twenty-two nations in that category for which
comparative data is available, Americans rank only 17th for life ex-
pectancy at birth, and 19th in terms of infant mortality rates. For some
other indicators, America comes very close to the bottom: Only one
country ( Belgium) has a lower percentage of pregnant women attended
by trained personnel during pregnancy; and in only two countries
( Greece and Portugal) do infants have a higher probability of dying be-
fore their fifth birthdays. In addition, 44 million Americans still have no
health insurance coverage at all.

No doubt a great many factors--demographic, genetic, technological,
lifestyle, climate, dietary, as well as variation in the structure of health care
delivery systems--can help to explain these comparative health out-
comes. In trying to understand why Americans manage to spend so much
more on health care, with zero or negative comparative health advantage,
this book considers one simple truth that is usually shuffled to the bottom
of the pack by the health care industry, by health care economists, and by
policy makers.

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