Saturday, October 2, 2010

The Cost of Healthcare in the United States

It's too early to see what will happen with healthcare reform in the United States. Will more Americans have access to healthcare? Will more people buy insurance and be covered? Will costs and spending go up or down? All these are questions that will take time to answer.

One thing is for sure. The United States spends per capita more on healthcare than any other country. This isn't necessarily a bad thing. You'd expect the richest nation to spend more dollars. After all everything costs more in the richest country in the world. But Americans are spending much more on healthcare when you compare against GDP. What's going on?

When I hear that not everyone is covered and insurance is not universal and companies aren't subsidizing insurance and coverage like they used to I have to stop and wonder. Why is it so expensive?

Aaron Carroll at The Incidental Economist just finished a multipart expose called What makes the US health care system so expensive. He points out that this particular analysis isn't about outcomes. It's not about whether Americans are getting better healthcare for the money. It's simply about where the money is going. Even if you're not going to dig into all the messy details the post on Red Herrings is interesting reading. At least you'll know whenever someone mentions one of them that they don't actually know the numbers behind their arguments.

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