Health Inc.

Health Spending Outstrips Economic Growth

The deepest recession in generations took a big bite out of spending on health care, slowing the growth to 4.4 percent in 2008, the federal government says.

So what? Health spending in the U.S. is still out of whack, growing faster than the rest of the economy yet again. Even though the spending increase for health was the smallest since the feds have been keeping track (48 years and counting), health care now accounts for 16.2 percent of GDP, up from 15.9 in 2007.

How much is that? Try $2.3 trillion or $7,681 per head. For the details, see the report in the policy journal Health Affairs.

Another ugly wrinkle in the latest days, NPR's Julie Rovner reports, is that one reason health spending grew more slowly is that more and more people just can't afford coverage.

Plenty of research shows that all the money Americans plow into health care isn't getting such terrific results. A report card last month from the Organization for Economic Cooperation and Development showed the U.S. led the pack of rich countries in health spending, and doing better in only a few areas, such as cancer care. Second place went to France, way back at 11 percent of GDP, a mark we Americans passed in the 1980s.

Columbia University statistician Andrew Gelman put together some data last month that compared health spending by country and life expectancy. Not a pretty picture:

Americans spends the most on health care but don't live the longest.

hide captionAmericans spends the most on health care but don't live the longest.

Andrew Gelman

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