Stuckness: Medical Spending

Stuckness: Medical Spending

One sometimes hears that medical care costs more in the U.S. than in any of the world’s other industrialized countries. That’s an accurate statement, and there’s nothing like a graph to underline the message. In the graph below, I use data on 20 OECD countries to illustrate yet another aspect of American stuckness.

(OECD = Organization for Economic Co-operation and Development. Founded in 1960.)

Measured as a percent of GDP, what America spends on medical care is anywhere from forty-five percent higher to well over a hundred percent higher than any other country’s medical spending.

South Korea, at 6.9% of GDP for medical care, does the best of the countries on this chart. The Netherlands, at 11.1% of GDP for medical care, is the second most costly, and next to the bottom. At the very bottom one sees the USA, at 16.4% of GDP.

As you examine this chart, remember that America's spending total reflects an era when the size of this country's senior cohort has not yet exploded. What trends in total medical spending might America experience as the size of the nation’s senior population almost doubles?

Since our politicians don’t have a real answer, most of them have crossed their fingers and imagined that healthcare for the nation’s elderly won’t be too expensive. Think of this as Stuckness on a truly grand scale.