High US health care spending is quite well explained by its high material standard of living

This is an amazing analysis on healthcare costs versus consumption of goods in the US and Europe. It shows that lots of the claims about the need for a single payer because the US is a complete outlier do not hold with good data, and that we might have less hanging fruits to attack if the goal is truly reducing healthcare expenditure in the US.

Lastly, one important point: since the major driver of healthcare expenditure in the US is volume, attacking things that lead to over utilization of the system might be proven wise (such as third party payment schemes, lack of price consciousness and price transparency, and tax exclusions).

Random Critical Analysis

About two years ago I created a long blog post arguing that the United States is not an outlier in healthcare expenditures per capita.   Following renewed interest from a link from Marginal Revolution recently and some criticism from a few people on various comment threads, I thought I’d take the time to update the evidence, address some areas of criticism, and muster yet more lines of evidence to support my argument.   This post should largely make the earlier post obsolete, but I will keep the earlier post up for posterity and to retain data/information that won’t necessarily be perfectly duplicated in this post.

There exist several popular plots like these that people use to make the argument that the United States spends vastly more than it should for its level of wealth.





These plots and the arguments that usually go with them give the strong impression that US spends about…

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