Tired of the rants from the right that appear drawn from thin air, I spent some time recently digging up information from legitimate sources of conservative opinion on health reform. I visited places online like the CATO Institute, The Heritage Foundation, The American Enterprise Institute, and The National Center for Public Policy Research.
One particular article caught my interest, particularly since I studied the Swedish health care system during my time at the University of Georgia and even had a chance to travel there as part of my research. The piece, written by Dr. David Hogberg, uses Sweden’s single-payer health care system to warn other countries about the difficulty in balancing rising costs against long wait times. The graph, shown below, is used to indicate that health care costs rose, then leveled off under a system of global budgeting that increased wait times for certain procedures, and that once reform was implemented to address the wait time issue, costs are on the rise again. It’s hard to argue with the numbers.
How does the United States compare? Well, see for yourself. Shown below are the data on national health expenditures as a percentage of gross domestic product for both the U.S. and Sweden during the 1970 to 2004 period used by Dr. Hogberg. (You may need to click on the image to pull up a larger version.)
Wow. It sure looks like the U.S. and Sweden, once fairly similar in terms of health care spending, have parted ways. Guess who’s devoting more and more of their national productivity to health care? I’ll give you a hint: Det ar inte Sverige. (That’s Swedish for “It’s not Sweden.”)
Lucky for me, the Centers for Medicare and Medicaid Services (CMS) has a lot more years of data available. Here’s what things look like if we examine the period from 1960 and include projections through 2018. To emphasize the overall findings, I’ve fit a trendline to the data. Notice how flat Sweden’s looks and how steep the growth trend is for the U.S.
If that’s not a stark contrast, I don’t know what is. Okay. So the U.S. is spending more and more of its GDP on health care every year, while things in Sweden seem to be increasing at a rate so slow that the growth is almost hard to see by comparison. What explains this? Well, it’s fairly simple. In the United States, our national health expenditures are increasing more rapidly than our GDP is from one year to the next, as the chart below makes clear.
As long as that green trend line stays above that blue trend line, we’re just going to experience more of the same. Here’s the kicker: Eventually, unless something changes to bring the green line below the blue line, our national health expenditures and our gross domestic product will become synonymous. In other words, we’ll be spending more and more of our resources on health care until we reach the point where all of our resources are spent on health care. Still think that the status quo is a better option than health reform? I sure don’t.