Healthcare: Spend a lot and get less

A new study iterates what many of us already knew: Americans spend more on healthcare — a lot more — than the people in any other developed country, and get less for their money.(1) The report is from researchers at the Johns Hopkins Bloomberg School of Public Health.

The paper finds that the U.S. remains an outlier in terms of per capita health care spending, which was $9,892 in 2016. That amount was about 25 percent higher than second-place Switzerland’s $7,919. It was also 108 percent higher than Canada’s $4,753, and 145 percent higher than the Organization for Economic Cooperation and Development (OECD) median of $4,033. 

So the cost of healthcare in the US is more than double the cost in Canada, and Canadians live longer.

What the article doesn’t explore is variations in the quality of healthcare within the US. Patients are very poor in accessing how good their doctors, hospitals and pharmacies are. Most have no basis for comparison. However, we know their’s a huge range in life expectancy across the US, with the best in the Northeast and along the California coast.


  1. Gerard F. Anderson, Peter Hussey, Varduhi Petrosyan. It’s Still The Prices, Stupid: Why The US Spends So Much On Health Care, And A Tribute To Uwe Reinhardt. Health Affairs, 2019; 38 (1): 87 DOI: 10.1377/hlthaff.2018.05144


  1. Mr Crain your post is a painful illustration of the broken system. Friends I know pay nearly two thousand dollars monthly for catestroohic coverage that will only pay out after they have spent an additional two thousand dollars – called a “deductible”. So the insurance ultimately pays for nothing and walks away with almost 25 grand every year.


    • Michael, There actually are good strategies to cut those costs, both for individuals and for people running LLCs with 2 or more employees. Frankly, I don’t think the catastrophic plans are worth having, although NJ just reintroduced the mandate that people carry health insurance at the state level, For individuals, Medi-Share is a faith based cost-sharing option that provides full coverage and is a small fraction of the cost of standard insurance, although the choice of doctors is limited. (It’s what standard insurance would cost, if like Germany, the US required health insurance to be non-profits.) For small businesses and those who choose to start a home-based business, self-funding plans like that from National General offer major savings. while using the Aetna or Cigna doctor network. The problem is that since most insurance agents either don’t know about these options or don’t make any money selling them, consumers never find out.


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