Mises Wire

Shocking Health Care Expenditure Stats

Piggy Bank Exploding

According to the World Bank, total expenditures for health care goods and services averages about 6-7% of GDP around the globe. There are about a dozen recognizable countries that spend more than 10% of GDP on health care, but far and away the biggest spender is the US with 17.9% and rising--more than 5% more than any other country and up from 13.5% just 15 years ago!

Health care expenditures as a % of GDP

The reason for this blotted and runaway spending is simple. American have too much health care insurance coverage, specifically comprehensive health insurance, and are therefore largely insulated from the true prices of heath care expenditures. The combination of public and private health insurance pay the vast majority of health care expenditures. In can be seen in World Bank data on out-of- pocket health care expenditures as a % of private expenditures on health care. The mean average for countries around the globe is over 80%, with a few recognizable countries like Germany and Canada around 50%, with the US coming in second last place at 20% and falling. A good bit of that 20% is co-pays and deductibles meaning that most Americans are not exposed to cash-free market prices. Obama Care’s system of cross-subsidation will only make it worse, although the rationing schemes employed by national health systems and the VA would reduce costs, as it reduces services. 

Out-of-pocket health care expenditures as a % of private expenditures

The US health care system combines a series of monopolies on the supply side and a series of subsidies on the demand side: Truly a prescription for disaster. 



All Rights Reserved ©
Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. 

Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

Become a Member
Mises Institute