There is a very common misconception that the reasons America spends so much more money on health care than any other industrialized nation is that we are fatter or we uniquely want to keep ourselves and  relatives alive too long. It is very disappointing to me to see what are basically myths promoted by prominent people, who at least understand what a problem our broken health care system is for our overall economy. From Jim Clifton, CEO of Gallup and author of The Coming Jobs War:

GMJ: How big of a problem is healthcare for businesses and for the economy?

Clifton: Few Americans realize the size of the problem. Healthcare costs America $2.5 trillion a year. That’s a problem alone. Remember, at the same time, the wars in Afghanistan and Iraq have cost the U.S. about $200 billion a year. That’s tiny compared to healthcare costs. You hear people say, “If we weren’t involved in two wars, we could afford healthcare costs.” No we couldn’t. It wouldn’t make much of a difference.


GMJ: Why are healthcare costs rising so fast in America relative to other countries?

Clifton: I would say two things. First, obesity is at epidemic rates, and so are the problems it causes, like diabetes. Second, we spend enormous amounts of money with no limits or caps on our last six months of life. Seventy percent of the money we spend on healthcare in the U.S. is on things that are preventable.

While obesity is a serious problem that adds to our health care bill, the far greater problem is that we simply pay way more than anyone else for the exact same medications, tests, devices and services. For example, getting an MRI in the United State can cost ten times what it costs in Japan. The data from the International Federation of Health Plans clearly shows that for almost every procedure and medication, Americans on average pay more than anyone else.

Even if you changed nothing about our habits, weight, demographics, usage of medical care, etc., but we just paid the same prices they do in Japan, Germany or Canada, our total health care spending would be slashed radically. Simply adopting price control systems like those used in other countries, in conjunction with an all-payer or single payer system, would bring our per capita health spending down to about their levels without reducing the overall quality of care American’s receive.

There are lot of people who want to blame the American people for their life choices, but that is not the heart of the health care spending issue. The simple fact is that our health care system is ripping us off, and the United States government is uniquely the only first world government that hasn’t taken the actions needed to stop it.