Wednesday, June 18, 2014

Every year, we waste Spain

The other day I posted a link to this Atlantic article on Facebook. I can't offer a pithier summary than the headline: "U.S. Healthcare: Most Expensive and Worst Performing." 

In my post, I said a quick back-of-the-envelope calculation shows we waste more than $1 trillion a year on health care spending. A blog isn't quite an envelope, I suppose, but here are the numbers:

U.S. GDP was $16.7 trillion in 2013, according to the CIA World Factbook (via Wikipedia). According to the article, 17.7 percent of that is spent on health care, far above the portion spent by other countries. Judging from the chart in the article, 9.7 percent would count as middle-of-the-pack, more or less. Well, 17.7 - 9.7 = 8.0, and 8 percent of $16.7 trillion is $1.336 trillion. QED. 

How much money is $1.336 trillion? A lot. If our wasted spending were an economy, it would be the 14th largest in the world, just behind Spain. (Wikipedia again.) Spain, in other words, manages to feed, clothe and house 47 million people, maintaining most of them in reasonable First World comfort, and manages to build all the roads, power plants, airports and so on that they need, not to mention hospitals, with what we spend on excess administration and paperwork, redundant and/or pointless procedures and drugs and services that cost way more than they should. 

Every year, in our health care industry, we waste Spain. 

You've got to admit, it's kind of an impressive achievement. 

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