Why Healthcare Costs More in the US than Europe

Why Healthcare Costs More in the US than Europe
February 04 18:05 2018

Healthcare in the US famously costs more and delivers less – less coverage per person, fewer people covered – with less to show for it than in Europe. The total of all healthcare costs in the US was $3.3trn in 2016 or $10,348 per person. In 10 industrialised nations with lower costs and better healthcare results than the US, it’s $4,386 per person.

In the US, healthcare costs grew at a rate of 4 %, adjusted for inflation – from $1.2trn to $2.1trn – while the overall economy grew at just 2.4 %.

Meanwhile, life expectancy is in decline in the US. The opposite is true in the United Kingdom, Germany, France, Australia, among others. (A 2011 Forbes article makes the point that not all deaths are due to poor health. There are deaths from violence and automobile accidents, too. Better healthcare may not completely eliminate the difference, but it would probably help.)

Many reasons for this discrepancy have been suggested, from Americans’ unhealthy eating habits to lack of exercise, to the high cost of pharmaceuticals to mandating coverage for benefits that not everyone needs. The answer may be tied to Americans’ attitude toward universal healthcare and money.

Is Healthcare a Universal Human Right?

Unlike 49 other “very highly developed” countries, the US doesn’t have universal healthcare (UHC) because a substantial part of the political establishment doesn’t consider healthcare a universal human right, only an entitlement. American politicians want to cut entitlements, not expand them.

Most of Europe is probably puzzled by this. After World War II many Europeans considered the right to health as a basic human right, as recognised by the 1948 Universal Declaration of Human Rights and the 1966 International Covenant on Economic, Social and Cultural Rights.

Even before the First World War, Americans on both sides of the political spectrum rejected UHC and more modest reforms time and again. Even when proposed by liberal and conservative presidents such as Theodore Roosevelt, Harry Truman, Lyndon Johnson, John F. Kennedy, Richard Nixon, Jimmy Carter, Ronald Reagan and Bill Clinton, their efforts were rejected, watered down or repealed.

American Opposition to Universal Healthcare

Americans’ antipathy to universal healthcare is partly due to its perceived costs, fear of communism and socialism (“socialised medicine”), and historic opposition from the American Medical Association (which didn’t like any form of UHC until the 2010 Patient Protection and Affordable Care Act – ACA or “Obamacare” – ruled out a public plan to pay for it).

Another reason could be because the US didn’t suffer the aftermath of WWII as much or in the same way as Europe. Our buildings and infrastructure weren’t demolished. The economy was booming. Besides, many Americans returned to find healthcare paid for by their employers (a workaround for wartime salary controls to entice in-demand employees). Healthcare as a human right didn’t seem necessary.

That attitude prevailed into the 21st century. The ACA, though flawed, was the closest President Obama could get to UHC even with majorities in both houses of Congress…

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