By Evan Falchuk

A friend sent me this interesting graph from the blog of the National Geographic.

You’ll have to click on it to see a bigger version.  It captures a lot of data very elegantly on a single graph–  Professor Tufte would love it.

What it shows is health care spending per person across a group of countries, along with life expectancies, average number of doctor visits per year, and whether a country has a system of universal health coverage.  Although putting all of this data on one graph is novel, the graph makes what by now is one of the oldest political arguments for reform – for all the money they United States spends on health care we don’t get a good deal.

So why blog about this graph?

Because it terrifically illustrates so many of the flawed assumptions about health care that have plagued the reform process.

First, pretty much nothing correlates with anything.

Does spending more lead to longer life expectancies?  It doesn’t look like it – and it’s not just the United States.  Canada spends almost $4,000 per person but gets roughly the same life expectancy Spain which spends about 35% less.  Luxembourg spends one and half times as much as South Korea, but their life expectancies are the same.  Meanwhile, Austrians spend three times as much as Poles, and live longer, too.  Life expectancies do not appear to be a good metric for health care quality.

What about going to the doctor more often?  That doesn’t seem to make much of a difference, either.  Japanese seem to the doctor almost monthly, but live about as long as the Swiss, who go once a year.  Oh, and the Swiss still spend about 70% more than the Japanese on health care.  Australians and New Zealanders go to the doctor about as often as each other, but Australians live longer, and spend about a third more on health care.  It doesn’t seem like rates of doctor visits tell you much about health care quality, either.

So maybe there’s something about having a “universal health coverage provided by public and private insurers.”  Nope.  If  you live in Hungary you’re going to live a decade less than your fellow beneficiary of universal coverage in Sweden.  Even among the countries in the top chunk of life expectancy, their relative spending levels and rates of doctor visits are all over the place.

So what’s going on?

Americans are often criticized for being ignorant of the cultural differences between our country and others.  We are seen as either wrongly assuming that people from other countries think about the world just like we do, or, worse, that we aren’t as enlightened as people living in other countries.  This chart, from an American organization, is fascinating in that it combines seeming ignorance of differences among other countries with ignorance of the United States.

Here’s what I mean.  The division of the world into “red” and “blue” countries, based on the idea of “universal” coverage is simply false.  For example, like the countries themselves, the health care systems of Canada, Britain and Japan are very different from each other.  Yet this graph treats them as if they were essentially the same.

But it’s also incorrect about the United States.  It’s true that the United States doesn’t have a system of “universal coverage provided by public and private insurers,” but the “United States” is the wrong entity to look at.  Health care coverage is mainly a state, not federal question in America.  And if we look at the states, we see a different – and more complicated – picture.

For example, Massachusetts has a system of “universal coverage provided by public and private insurers.”  It enjoys a life expectancy at birth of  80.2 years.  Sounds like one of the “blue” countries.  But Massachusetts spends $7,000 per person per year on health care.  On this chart it would be a puzzling outlier.

Hawaii has an almost universal system, but spends far less than Massachusetts per person.  And yet it has the highest life expectancy in the country.  It, too, would be an outlier.    Meanwhile, “red” New York, where almost 15% of the population is uninsured, ranks sixth in the country in life expectancy and spends about $6,500 per person on health care.  Another outlier.

At a certain point, the existence of almost nothing but outliers ought to make you question your initial assumptions.

Not so with health care.   The story that the United States gets ripped off in its health care spending sticks because it is a convenient oversimplification.  It’s a catchy slogan to advance (or with other slogans, oppose) difficult to understand changes to a complex system.

But the problem with health care in America is we keep getting lured into assumptions that money is the right metric to measure the quality of medical care.  How much we spend, rather than whether patients are getting the right care.  Money, over medicine.

He puzzled and puzzled till his puzzler was sore. Then the Grinch thought of something he hadn’t before! Maybe Christmas, he thought, doesn’t come from a store. Maybe Christmas… perhaps… means a little bit more!

Merry Christmas.

UPDATE: Via Instapundit, Economist Dan Mitchell says the problem is the rise of third party payers for health care.  He includes his own graph that implies that the trouble is people are paying too little out-of-pocket for health care.  In this view, since people spending other people’s money don’t care how much they spend, high US expenses can be explained in this way.  It’s an interesting idea, except that if you look at other countries, like Canada, where the system is almost entirely third-party payer and has been for a long time, costs are far lower than the United States.  And in any case, the people who drive most of our health care costs are spending at levels that far exceed whatever deductibles or co-pays you could ever put on them.  It’s not about out of pocket costs.

If there’s a lesson to be taken from all of this it’s this: beware of charts promising simple explanations for health care costs.

But if you want to look at a chart that shows the biggest drivers of health care costs, try this the one in this post.  The misguided focus on saving money over good medicine means we get neither.  The surest way to save money is to make sure that patients get enough time with their doctors, who need to be able to use their training and judgment to help their patients make the right decisions.  It’s a global problem, but America suffers from the most exaggerated version of it.

UPDATE 2: Jon Peltier does a terrific analysis of the same data with alternative versions of the National Geographic chart.