September 8th, 2009

The United States Already Spends More Per Capita On Socialized Medicine

In this video Al Franken is not exactly "talking down an angry mob" but he and the people who disagree strongly with him seem to be having a fairly reasonable discussion. I consider this remarkable considering that the level of political discourse between partisans has not been particularly inspiring lately.

At the 5:54 mark the woman on the left asks a good question: "Do you honestly feel, given how everything is, that it can be paid for by the government and by the taxpayers and by all of us?" This question brings me to a recent realization that I've been meaning to mention.

The United States does not offer universal health care to its citizens, but our government does spend some amount of taxpayer money on socialized medicine in the form of Medicare, Medicaid, and the VA system. The government also reimburses hospitals for deadbeat patients who have, for example, visited the emergency room where health care is most expensive and provided a fictitious name or accounts which are otherwise unbillable.

How much money does the United States pay for its limited version of socialized medicine? Let's look at the numbers from the 2009 World Health Statistics report.

In the United States $6719 is spent per capita on health care, $3076 of which was government spending.
In Canada $3673 was spent per capita on health care, $2587 of which was government spending.

In other words the United States spends more money per taxpayer providing national health care to some of its citizens than Canada spends per taxpayer providing all of its citizens with health care. And Canada is not even a particularly efficient example. Here's a table I made from this data comparing per capita public health care expenditures. Every country except Denmark spends less tax money toward health care, and Denmark still beats us in both quality and total health care expenditures.

So in answer to lady-sitting-to-the-left-of-Al yes, I absolutely believe that "given how everything is" universal health care could be paid for by the government. The lady wearing the "Taxed Enough Already" t-shirt will be happy to know that the average taxpayer would get a ~$550 tax cut, we (or our employers) would pay ~$3000 less out of pocket, we'd be getting 10% better health care than we have now, and everyone would be getting it rather than just veterans, poor people, and old people. And that's just if we do an average job. If we're able to provide universal health care not particularly well.

You want best case? France gets credit for being #1 but the real cost/benefit superstar is Italy. If America adopted the Italian health care system we'd all get a $1045 tax cut, we (or our employers) would pay $3000 less out of pocket, and we'd get health care that's 18% better than what we have now. I should add that Italy somehow manages this even though it's a gateway to Europe for Africa and the Middle East and is flooded with illegal immigrants.

- We're talking about local expenditures not financial flows so I'm using PPP exchange rates not dollar exchange rates.
- I selected the countries on the list at random. If there's a country you'd like to see in the table I can add it.
- Italians might have better numbers due to diet and lifestyle.
- The most recent cost figures are from 2006 but the most recent quality ratings are from 2000 so it's possible things have changed.
- OSX 10.6 / Safari users who click on the WHO's pdf might crash their browser. This bug has been reported.

I just added Ireland, which is an interesting case. Their total health care spending is only $2034 per capita and the government covers a little more than half of that, but for $1938 less tax money and a mere $896 out of pocket per year they still manage to rank 10% better than the USA in quality. I'd also like to know why Norway ends up spending so much.