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United States Out-of-Control
Health CareSpending

Health Care Spending Among 30 Free-Market Countries

Position at graph.


Out-of-control U.S. health care costs, compared to other countries, started shortly after the U.S. started an increased focus on private health insurance companies via “managed care” and health maintenance organizations (HMO’s), while maintaining the private health insurance companies. That activity in the United States occurred shortly after the 1883-1972 period during which the majority of other free-market countries had completed their implementations of their health care for all systems, which allow them to have health care costs much more "in control" than the United States.

Spending Among 30 Countries

Also see the similar graph for Canada vs. United States.

Source a New York Times graph of data from the OECD, Organization of Economic Cooperation and Development and its 30+ free-market countries

What happened in the 1970’s to cause this serious problem relative to other countries?

  1. OUT of the USA: National Health Insurance. The majority of other countries completed their implementations of national health insurance on or before the mid-1970’s. Canada was one of the last ones.

  2. IN the USA: Health Insurance Companies. The United States began an increased use of the free-market private health insurance companies in the mid-1970’s by the use of the “managed care” concept. The increased focus on the free-market in the U.S. of that “managed care” concept must sound cool, because some citizens still believe in it’s HMO’s are a good thing. It was a dismal failure, as this graph and the similar Canada graph show. So much for rationing care by restricting doctors and having each health insurance company determine their rules (for what they would pay for) … and so on … and so on.

The U.S. is the only free-market country without a health-care-for-all system and with such a large involvement of for-profit companies. Most of the other countries have 1) no for-profit health insurance companies or 2) have health insurance companies that are non-profit and strictly regulated. The majority of other free-market countries established their health-care-for-all systems between 1883 and 1975. About 1975 the United States shifted its method of paying for health care to an increased focus on private health insurance companies via the concepts of “managed care” and health maintenance organizations (HMO’s), along with maintaining the use of the private health insurance companies. By the 1980's the United States became the only free-market country with out-of-control costs. It has maintained that position in a dramatic way ever since.

 

Note: With additions gradually made by OECD (Organization of Economic Cooperation and Development) their number of free-market countries has grown to be over the 30 that we reference.

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