Cato Institute
Policy Analysis
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To a large degree,
of the problems that currently afflict its health
Introduction
care system. As Krugman says, "The obvious
America spends
way to make the U.S. health care system more
money on health
efficient is to make it more like the systems of
In his movie SiCKO, Michael Moore
other advanced countries."4
care because it is a
explores problems with the U.S. health care
system and advocates the adoption of a gov-
There is no doubt that the United States
wealthy nation
ernment-run, single-payer system.1 Moore
spends far more on health care than any
and chooses to
other country, whether measured as a per-
compares the U.S. system unfavorably with
centage of gross domestic product (GDP) or
those of Canada, Great Britain, and France.
do so.
by expenditure per capita. As Figure 1 shows,
Economist and New York Times columnist Paul
the United States now spends close to 16 per-
Krugman also thinks the health care systems
cent of GDP on health care, nearly 6.1 per-
of France, Britain, and Canada are better than
that of the United States.2 Physicians for a
cent more than the average for other indus-
trialized countries.5 Overall health care costs
National Health Program points out that the
United States is the "only industrialized coun-
are rising faster than GDP growth and now
try without national health care."3
total more than $1.8 trillion, more than
Americans spend on housing, food, national
These and other critics of the U.S. health
defense, or automobiles.6
care system note that countries with such sys-
tems spend far less per capita on health care
Health care spending is not necessarily bad.
than the United States does and, by some mea-
To a large degree, America spends money on
sures, seem to have better health outcomes.
health care because it is a wealthy nation and
These critics contend that by adopting a simi-
chooses to do so. Economists consider health
lar system the United States could solve many
care a "normal good," meaning that spending
Figure 1
Total Expenditure on Health Care as a Percentage of GDP
United States
Switzerland
France
Germany
Canada
Portugal
Norway
Greece
Netherlands
Italy
Spain
United Kingdom
Japan
0
2
4
6
8
10
12
14
16
Source: Organisation for Economic Co-operation and Development, "OECD Health Data 2007: Statistics and
Indicators for 30 Countries," (Paris: OECD, July 2007); 2004 data.
2