Aging Options

U.S. Healthcare Spending is Sky-High, but Life Expectancy is Dismally Low

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“We’re number one!” That’s the chant that reverberates in sports stadiums and arenas across the country. It’s also the cry of most red-blooded American patriots: when we consider all the things that make a country great, America is indeed “number one,” or so we like to believe.

But sometimes being at the top of the heap isn’t such a good thing after all. As exhibit A, we offer two sources of data recently published online that reveal a major disconnect in the arena of healthcare. We first brought you this story last spring but we’ve updated it with newer data.

Tops in Health Spending – Not so Good for Life Expectancy

When it comes to healthcare spending per capita, the USA is far and away the world’s leader in outlay. Unfortunately, the results of all that spending are, to put it mildly, disappointing, even disgraceful: how could the nation that spends almost twice as much per person on healthcare as the average of comparable countries end up #47 in life expectancy?

Let’s take a look at the numbers. Then we’ll ask Rajiv Nagaich to offer a few comments on how these statistics might affect our own medical planning in retirement.

America Outspends Comparable Nations Two to One

One authoritative source on health care spending, we’ve found, is a website called Health System Tracker. It’s a joint project of The Peterson Center on Healthcare and The Kaiser Family Foundation which was created, says the website, “to monitor how well the U.S. healthcare system is performing in terms of quality and cost.”

There are many ways to slice and dice the cost of healthcare. But on the Health System Tracker website, we found data that compares U.S. spending to health spending in other countries that the website says “are similarly large and wealthy, based on median GDP and median GDP per capita.” The conclusion is crystal clear: “Relative to the size of its economy, the U.S. spends a much greater amount on health care than other high-income nations.”

Spending Comparison is Complicated

The website acknowledges that side-by-side comparison of spending is often a challenge because nations have much different systems in place. “Comparing health spending in the U.S. to other countries is complicated, as each country has unique political, economic, and social attributes that contribute to its spending,” says Health System Tracker.

But the disparity between America and the rest of the developed world, even considering those economic and societal differences, is staggering. “On average,” the data shows, “other large, wealthy countries spend about half as much per person on health as the U.S.” Let’s look at a few specifics.

Annual Per Capita Healthcare Spending: The Top 12

Here’s who’s spending what per person, based on updated statistics:

1. United States            $12,555

2. Switzerland                $8,049

3. Germany                       $8,011

4. Austria                           $7,275

5. Netherlands               $6,729

6. France                            $6,630

7. Belgium                        $6,600

8. Sweden                         $6,438

9. Australia                      $6,372

10. Canada                       $6,319

11. UK                                 $5,493

12. Japan                           $5,251

The average of countries comparable to the U.S. is $6,651 per year – a bit over half of the American spending figure.

U.S. Spends Far Higher Percentage of GDP

According to the Health System Tracker website, the disparity between U.S. healthcare spending and that of comparable nations may be growing. “Over the past five decades, the difference between health spending as a share of the economy in the U.S. and comparable [developed] countries has widened,” says the website. In 1970, the U.S. spent about 6.9 percent of its GDP on health, which was higher but still close to the spending rate in comparable countries. This relative spending rate began to change dramatically in the 1980s when health spending in the U.S. started to shoot up at a rapid rate.

Then came the COVID-19 pandemic, which, says the website, “led to both an increase in health spending and an economic downturn resulting in higher health spending as a share of the GDP in the U.S. and every comparable country between 2019 to 2020.”  From a spending level of less than 7 percent of GDP in 1970, by 2020 the U.S. was spending 19.7 percent of its GDP on health consumption! That figure declined somewhat to 18.3 percent in 2021, but no other developed nation is even close. Germany is nearest at 12.8 percent of GDP.

Number One in Spending – with Dismal Results

Given the exceptionally high spending rates in the United States, our overall performance in ensuring a long life for our citizens should be at or near the top of the heap. But the facts dispute that expectation. The numbers, in fact, show the exact opposite.

We took a look at longevity tables shown on this website called Worldometers. Overall, it showed an encouraging historical trend worldwide toward longer life expectancy. Back in 1950, worldwide, an average male could only be expected to live 45.5 years and a female 48.5 years. But with advances in nutrition, health care, and sanitation, the comparable figures today – again worldwide – are 70.8 years for men and 76 for women.

However, according to the Worldometer website, there are major differences between nations. Based on most recent statistics, Hong Kong, Macao, and Japan lead the pack with average life expectancy of around 85 years. Canada, South Korea, and several European countries average between 83 and 84 years.

So where is the U.S.? We currently rank an unimpressive #47 in life expectancy – 82.2 years for women, 77.3 for men, or 79.7 for the average American. That puts us below Kuwait, Costa Rica, and Thailand, but we still have bragging rights over Albania, Turkey and Uruguay. (Tragically, the bottom 10 countries, with average life expectancy below 60, are all clustered in Africa.)

The disappointing fact is, for all our flood of spending, we don’t have the results to show for it. It’s not a problem any of us can easily fix – but it should affect the choices we make.

Rajiv: Billions in Healthcare Dollars Are Misspent

“The American healthcare system is a study in opposites,” Rajiv Nagaich says in response to this story. “On one hand you have the best research facilities, the best medical schools, and the most sophisticated biotech industry in the world. But on the other hand, we’re not achieving the most basic benefit we should be getting: we’re not living longer, healthier lives. Where is the disconnect?” he wonders aloud.

In Rajiv’s view, there are many culprits in this sad equation. “Let’s face it,” he states, “much of American health care revolves completely around the health insurance industry and the pharmaceutical industry. These multi-billion-dollar companies make a lot more money keeping you sick than keeping you well. What that means,” he adds, “is that you can’t wait around for a magic pill or a magic surgery or a new government program to help you preserve your health. This is one area where you have got to take charge of your own longevity!”

Rajiv’s recommendations: find the right physician, ideally a board-certified geriatrician who understands the physiology and psychology of aging. Make sure your health insurance plan doesn’t just treat you when you’re sick but also helps you stay well. “And for heaven’s sake,” says Rajiv, “you know you need to get some exercise, stay socially engaged, and eat right. The best time to start is ten years ago – the second-best time is today! No more excuses!”

Contact us and we’ll help you get the right answers when it comes to finding the right doctor and staying well. We can’t solve the problem of out-of-control U.S. healthcare spending, but we can take charge of our own healthcare. What are we waiting for?

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(original article from various sources)

Need assistance planning for your successful retirement? Give us a call! 1.877.762.4464

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