According the 2019 Bloomberg Healthiest Country Index, the U.S. ranks 35th out of 169 countries. Even though we are the 11th wealthiest country in the world, we are behind pretty much all developed economies in terms of health. In the Americas, not just Canada (16th) but also Cuba (30th), Chile and Costa Rica (tied for 33rd) rank ahead of us in this Bloomberg study.
To answer this layered question, we need to look at the top ranked countries in the Bloomberg Index: From first to 12th, they are Spain; Italy; Iceland; Japan; Switzerland; Sweden; Australia; Singapore; Norway; Israel; Luxembourg; and France. What are they doing right that the U.S. isn’t? In a nutshell, they embrace half a dozen critical economic and societal traits that are absent in the U.S.:
· Universal health care
· Better diet: fresh ingredients and less packaged and processed food
When it comes to access to health care, the 34 countries that are ahead of the U.S. in the Bloomberg health rankings all offer universal health care to their people. This means that preventive, primary and acute care is available to 100% of the population. In contrast, 25 – 30 million Americans do not have health care insurance, and an equal number are under insured. For 15 – 18% of our population, financial concerns about how to pay for a visit to the doctor, how to meet high insurance deductibles, or cash payments after insurance take precedence over taking care of their health. Lack of preventive care leads to visits to the emergency rooms for ailments that could have been prevented through regular primary care follow-up, at a very high cost to our health system. Note: We spent $10,700 per capita in health care in 2017, more than three as much as Spain ($3,200) and Italy ($3,400). Many Americans postpone important medical operations for years, until they reach 65 years of age, when they finally qualify for universal health care or Medicare. Lack of prevention and primary care, health interventions postponed, and the constant worry that medical costs might bankrupt one’s family: none of this is conducive to healthy lives.
Having survived years of attacks from Republicans at the federal level, will the surviving ACA be rendered obsolete by Democrats’ local and state efforts towards universal health care? This could be an ironic twist of fate for Obamacare. Conceived out of the conservative Heritage Foundation’s ideas and an early experiment in Massachusetts under a Republican governor, President Obama’s signature legislative achievement could very well survive its most recent judiciary challenge. But over time the ACA is susceptible to obsolescence, because of the many universal health care solutions being pushed at the state level.
Let’s start this brief outlook for Obamacare by reviewing how it has played defense, quite successfully thus far: During most of 2017 and 2018, the future of the ACA was always discussed in the context of Republican efforts to repeal it. After all, the GOP controlled the White House and both Chambers of Congress. Hadn’t Republicans spent the last four years of the Obama administration promising to repeal Obamacare the instant they could? And so they went after the ACA in 2017 with all the levers of Washington power. But repealing is one thing, legislating another: We know what happened in July 2017, when the last “repeal and replace” effort was defeated in the U.S. Senate by the narrowest of margins, because three Republican Senators, Susan Collins, Lisa Murkowski, and the late and much regretted John McCain, voted against the repeal. With their December 22 tax law, Republicans did succeed in eliminating the ACA’s individual mandate tax penalty owed by individuals failing to maintain “minimum essential coverage.” Most medical plans qualify for this, as long as they meet a number of requirements, such as not charging more for pre-existing conditions. For good measure, the Trump administration used executive orders in 2018 to allow low-cost plans not meeting these ACA guidelines to be offered by employers. Twenty state attorney generals from Republican states, led by Texas and Wisconsin, also initiated litigation against the ACA, arguing that without the tax penalty the law had become unconstitutional.
The official 2017 statistics from the U.S. Department of Health and Human Services (DHHS) are out, and there are some good news: The annual growth rate of health care spending is slowing down, and is the lowest since 2013 at 3.9%—it was 4.3% for 2016 and 5.8% for 2015. The bad news is that our health care cost increases are still well above inflation, and that we spent $3.5 trillion in this area, or 17.9% of GDP. Americans spent $10,739 on health care in 2017, more than twice as much as of our direct economic competitors: This per capita health care spending was $4,700 in Japan; $5,700 in Germany; $4,900 in France; $4,200 in the U.K.; $4,800 in Canada; and an average of $5,300 for a dozen such wealthy countries, according to the Peterson -Kaiser health system tracker from the Kaiser Family Foundation, and OECD data. Spending almost a fifth of our GDP on health care, compared to 9-11% for other large developed economies (and much less in China), is like having a chain tied to our ankles when it comes to our economic competitiveness.
Could 2019 be the year when our health care spending actually decreases, or at least grows at a slower pace than inflation? Or will we see instead an uptick in costs for health care consumers?
To answer these questions, we need to look in more detail at the largest areas of health care spending in America, and at the recent but also longer term spending trends in these areas. Using the annual statistics from the DHHS, we can compare the growth in spending in half a dozen critical health care categories with the growth in total spending, and this for the last three years as well as the last decade. Over the last decade, since 2007, these costs grew 52% in aggregate (from $2.3T to $3.5T) and 41% per capita (from $7,630 to $10,740).