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Paying More for Less (Editorial)

2 min read

Health care costs in the United States are unsustainable, punitive to every American — except, of course, to those who benefit from this unsustainable system — and a drag on an otherwise robust economy.

A graphic shown in Health Care Spending & Outcomes of this issue of Arkansas Business illustrates what is becoming an American health care tragedy: We spend more on health care than other developed countries, yet many of our health outcomes are considerably worse.

One particularly striking example of outsize U.S. spending compared with other rich nations comes in the area of administrative costs, which averaged $843 per person in the U.S. in 2018 compared with an average $175 per capita among developed nations, according to the Peter G. Peterson Foundation.

Despite the high price of our health care, life expectancy in the U.S. is declining. A higher death rate among middle-aged people of all races is driving the decline. The major causes of these deaths are drug overdoses, alcohol-related liver disease and suicide, what husband-and-wife economists Anne Case and Angus Deaton, who discovered and described the phenomenon, call “deaths of despair.”

Speaking at the American Economic Association’s annual meeting recently, Case said, “A few people are getting very rich at the expense of the rest of us,” adding that the U.S. health care system, the most expensive in the world, is “like a tribute to a foreign power, but we’re doing it to ourselves.”

“We can brag we have the most expensive health care. We can also now brag that it delivers the worst health of any rich country,” Case said.

The causes of both the nation’s unsustainable health care costs and deaths of despair are complex, but paying more money for worse outcomes is literally deadly. No successful business would long allow it. Why does this nation?

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