A few weeks ago, in detailing how Canadians love their health care system and want it to be even more socialized, I wrote:
See the dirty secret here is that Canada has historically been notably less wealthy than the US (Nationmaster lists the US at $6K higher in GDP per capita for 2006) and there was always an element of apples to oranges in comparing our systems. We have fewer MRIs? Well, duh. Of course America should have had the better system, and at the upper end of the income spectrum, they probably do. The fact that we're ahead at all is itself an indication of how broken the US model is.
So let's transmogrify those oranges into apples, and get some idea what it would mean to implement US level health spending within other systems. US health care reform opponents have recently moved from bashing Canada to the UK's NHS, but the same sort of disparity applies. In 2006, the UK spent about US$192B (8.2% of GDP) on health care, based on an economy that generated $39K per capita. America spent $2 trillion (15.3%) based on an economy that generated $44K per capita. The Brits too, spent less of their national income on health care, but that income is proportionally smaller too. Let's adjust both dials and see what we get.
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| Methodology and Sourcing
2006 was picked because it's the latest year that the WHO has yet published health spending stats for). GDP taken from trusty Nationmaster and population from here.
The method was to take each nation's population (Canada, UK, New Zealand, Australia) and GDP and calculate the per-capita GDP. All of them are less than the US, so use the US figure ($44K) and multiply by each nation's population to get a theoretical GDP at American economic activity rates. Next, using these nation's current health spending levels, calculate the new total health spending based on the inflated US income level GDP, and note how much more health spending it generates. Next, the really fun part, also bump these nations up to the US level of 15% of GDP, using the inflated GDP and see how much more money these pinko systems would have to play with.
Raw Data, Starting Point
First up, the raw data from the sources described above, except for per-capita GDP and the actual health spending figures, which were derived from the data.
Adjustment the First
Next, we adjust the non-US nations' GDP based on $44K per capita and recalculate what their GDPs would be, and the ensuing health spending if kept at these nations' distinct 2006 levels:
As we see, Canada gets a respectable extra $18B for health care in this scenario. Not too shabby. New Zealand would be able to almost double its health spend.
Adjustment 2
Now, let's imagine they're not just as rich as the US, but as crazy too and they decide to dedicate 15.3% of GDP to health too. Per capita, they're now at the US level of $6700 a person.
Now Canada has an extra $95 billion to spend on executing the elderly, experimenting on eugenics and trepanning. New Zealand has actually tripled its health budget. They'd possibly need to have some form of conscription to actually force citizens to check into hospital often enough to use up that amount of money.
What It Buys
To get some sense of what these amounts of money would buy, here's some of the usual items Canada is deficient on which its health critics exaggerate about, with approximate costs and how many more we could buy:
MRI cost. Doctor salaries. Nurse salaries. As we can see, Canada could supplement its 176 MRI scanners with a hefty 5,300 more, just under the first scenario. We probably wouldn't buy that many, so we could address our nurse and doctor shortage with some combination of 40,000 surgeons, 80,000 GPs or 300,000 nurses. It would be less, as we'd have to build a bunch of hospitals to put them in, but I think the point is clear enough. If Canada spent on health care like the US does, I'm not sure we would even know what to do with the money. I have a hard time imagining there would be wait list problems for MRIs or hip replacements.
Naturally, there's an element of absurdity to this. It is just an exercise. After all, if these nations could bump their GDP up to US levels, they would already have done so. I suppose a libertarian sort might argue that the US being so much wealthier has something to do with its health care system, and at a gross GDP level, they're not completely wrong. After all, the US spent $2 trillion on health care in 2006. That counts toward its GDP, even if a lot of it is for harmful insurocrats and CEO bonuses. Bizarrely, successful health reform could actually shrink GDP if it succeeds in generating real savings. This is just one of the problems of using GDP as a metric - something understood since at least 1968, when RFK spoke compellingly about it.
Really what I think this shows is what a massive collection of criminal fraud the current US health "system" is. It's just really bad value for money. |
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