Today I would like to talk about the relatively high cost of healthcare in the US as compared to other nations. To offer some perspective on how large this gap is, consider the per capita cost of healthcare in the US ($6096) to that of Canada ($3173) in 2007. Why such a large disparity?
One way to explain the high cost is by comparing the per capita GDP of a country against its per capita healthcare costs as shown in the figure:
By analyzing this data we can see that there is a fairly strong correlation between the per capita GDP and per capita cost of healthcare; the higher the GDP, the higher the healthcare costs. Though this alone does not account for the huge disparity, there are several other factors affecting the price of healthcare.
For one, we pay "[higher] prices for the same health care goods and services" than other countries with similar services. We pay oodles more in administrative overhead costs than other countries with "simpler health insurance systems." We use high tech equipment more frequently than most other countries, and lastly hospitals apply tests as a defense against malpractice lawsuits resulting in higher treatment costs.
Taking all of these things into consideration, perhaps it is understandable why healthcare costs are so high, yet that does not mean that they could not be lower.
Thanks for Reading
Sources:
http://www.infoplease.com/ipa/A0934556.html
http://economix.blogs.nytimes.com/2008/11/14/why-does-us-health-care-cost-so-much-part-i/
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