NHS In Raw Dollars

The slings and arrows of hypocrisy allegations are being flung my way for comparing US and UK health expenditures as percentages of GDP in this post while using raw per capita numbers in a post earlier this week. Got me! Except it doesn't make a difference. The UK spends about 7 percent of GDP on health care to America's about 14 percent, or at least those were the numbers Ezra used. Looking at my GDP per capita table, you'll see that English GDP per capita is about 90 percent of American GDP per capita. So there's a huge disparity between UK and American spending either way you look at it. Using purchasing power parities (usually I'm clear on when it is and is not a good idea to use PPP adjustment for international comparisons, but I'm not sure about this case) the mean United Kingdomite is 70 percent as rich as the mean American -- a bigger gap, but still too small a gap to make up for the difference.

On the general question of raw dollars versus percentage of GDP, I think both have their uses. It makes perfect sense for societies to allocate a higher proportion of their resources to health care as they grow richer -- the extra wealth has to go to something. So it's not a sign of profligacy if, say, rich Iceland turns out to spend a higher proportion of GDP on health care than does relatively poor Portugal. That could be waste and inefficiency, or it could be a reasonable social choice. But. The point of spending a rising portion of GDP on health care as your society grows richer is supposed to be producing better health outcomes. For two countries getting the same health outcomes, the country spending more dollars per capita is doing worse. For two countries spending the same dollars per capita, the one with the worse health outcomes is doing worse. Having a high GDP is not an excuse for high per capita spending in exchange for worse health outcomes, it's a reason for high per capita spending in exchange for better health outcomes.

P.S. On the pseudo-fact that we need to spend so much on health care in order to avoid a doctor shortage, note that doctoring is a guilded profession in the United States that has successfully managed to severely restrict the supply of new doctors by refusing to increase the number of medical schools despite a large increase in the demand for medical services and by constructing a pointlessly arduous residency process. As with any artificially restricted supply, costs go up in response. You could rather simply make it easier for people to become doctors without seriously reducing bona fide training standards (as opposed to weird psychophysical endurance tests).