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 better, 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 Organization (WHO), out of twenty-two nations in that category for which comparative data is available, Americans rank only 17th for life expectancy 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 before 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 outcomes. 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.