Five Myths About American Health Care

Christopher J. Conover, PhDCenter for Health Policy and Inequalities Research

Duke UniversityFebruary 28, 2012

Road Map• Myth #1: Relative to other countries, the U.S.

spends “too much” on health care• Myth #2: Other countries do better at controlling

health spending growth• Myth #3: The U.S. abysmal infant mortality rates

compared to other nations• Myth #4: The U.S. has much lower life expectancy

relative to its competitors • Myth #5. The U.S. has worse health outcomes

than its peers

Myth #1: Relative to other countries, the U.S. spends “too

much” on health care

19.4a | The conventional wisdom is that U.S. health spending is 60 percent above its expected level given the nation’s per person GDP

10,000 18,000 26,000 34,000 42,000 50,000 58,000 66,000 74,000$500

$1,500

$2,500

$3,500

$4,500

$5,500

$6,500

$7,500

Iceland Ireland

NorwayLuxembourg

Health spending per person (U.S. purchasing power parity, 2006 dollars)

”Excess spending”

GDP per Person (U.S. Purchasing Power Parity, 2006 dollars)

19.4b | Once sub-national areas are taken into account, U.S. health spending is almost exactly where it is expected to be given U.S. GDP

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000$500

$1,500

$2,500

$3,500

$4,500

$5,500

$6,500

$7,500

$8,500

$9,500

$10,500

US-CO

US-MA

US-CA

US-PAUS-NJ

US-NYUS (All)

UK

FRANCE

IRELANDPORTUGAL

NORWAY

US-TX

OECD CountriesUS StatesCA ProvincesAU StatesBest-Fit Model

GDP Per Capita (US Purchasing Power Parity, 2006 dollars)

Health spending per person (US purchasing power parity, 2006 dollars)

Note: all areas with less than 4.1 million population have been excluded.

Myth #2: Other countries do better at controlling health

spending growth

1.6a | The difference between the U.S. and other G7 nations in the health spending share of GDP has grown wider since 1980

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2

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11

14

17US (#1)France (#5)Germany (#3)Canada (#7)Italy (#6)UK (#4)Japan (#2)

NHE as a Percentage of GDP

Figures in parentheses show country ranking within OECD based on size of GDP in 2007.

U.S. Japan Germany UK France Italy Canada0

2

4

6

8

10

12

14

161960-70 1970-80 1980-90 1990-2000 2000-2007

Compound Annual Growth Rate in Inflation-Adjusted Health Spending per Capita

1.6b | For 50 years, growth in real health spending per capita has not been noticeably higher in the U.S. relative to other G7 countries

Countries ranked by size of GDP in 2007. Growth rates estimated from real NHE per capita (calculated in chained 2005 U.S. dollars using a GDP price deflator)

Japan Germany UK France Italy Canada$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

$11,0001960 1980 2007

U.S. margin of advantage in non-health inflation-adjusted GDP per capita (2005 dollars)

1.6c | The U.S. advantage in inflation-adjusted non-health GDP per capita has increased since 1980 relative to nearly all G7 nations

Countries ranked by size of GDP in 2007. Inflation-adjusted GDP per capita is measured in constant chain series, 2005 U.S. dollars, as reported in Penn World Tables.

Myth #3: The U.S. abysmal infant mortality rates compared

to other nations

19.10 | Except for Sweden and Norway, the U.S. generally leads to world in saving the lives of premature infants

22-23 Weeks 24-27 Weeks 28-31 Weeks 32-36 Weeks 37+ Weeks0

50

100

150

200

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350

SwedenNorwayU.S.England/ WalesAustriaFinlandScotlandDenmarkNorthern Ireland

Note: countries ranked from best to worst for infants with the shortest gestation period.

Infant mortality index (U.S. = 100)

Myth #4: The U.S. has much lower life expectancy relative

to its competitors

19.9a | Once higher-than-average U.S. rates of violent deaths have been taken into account, the U.S. leads the world in life expectancy

U.S. (15)

Switzerla

nd (4

)

Norway

(6)

Canad

a (5)

Denmark

(16)

German

y (13

)

Icelan

d (2)

Sweden

(3)

Japa

n (1)

Austra

lia (8)

France

(9)

Belgium

(11)

Austria

(14)

Netherl

ands

(7)

Italy (

10)

UK (12)

727374757677787980Raw Life Expectancy Standardized Life Expectancy

Mean life expectancy at birth, 1980-1999

Note: Countries are ordered by standardized life expectancy derived by assigning each country the mean OECD fatal injury rate for the period shown; figures in parentheses denote ranking on unstandardized life expectancy at birth.

Myth #5: The U.S. has worse health outcomes than its

peers

19.11a | The U.S. leads the world in female cancer survival rates for the leading causes of cancer deaths

Breast Cervical Thyroid0

20

40

60

80

100

120

Note: countries ranked from best to worst for breast cancer

U.S. WhitesU.S.SwedenFranceSwitzerlandItalyGermanyDenmarkU.S. BlacksEngland

Five-year female cancer survival rate indexes (U.S. = 100)

19.11b | Despite a larger uninsured population, cancer screening rates for adults 50 and older are much higher in the U.S. than in Europe

Mammography Pap Smear Colonoscopy PSA0%

10%

20%

30%

40%

50%

60%50-64 65-74 75 & Over

European cancer screening rates as a percentage of U.S. rates

Conclusions• The U.S. health system has many problems• But other countries do not offer a magic bullet• Misconceptions helped put health reform on

the wrong path: government-controlled health care

• Governor Mitch Daniels: “Smart decisions always start with clarity about the facts”