Columnist explores reasons for discrepancy in U.S., foreign health spending, related life expectancies

The answer to why many countries spend less on health care than the U.S. and have higher life expectancies is "fantastically complicated -- but also fantastically important," New York Times columnist David Leonhardt writes.

According to Leonhardt, Greece spends $2,300 per capita on health care each year with an average life expectancy of 79, while Canada spends about $3,300 with an average life expectancy of about 80 and the U.S. spends more than $6,000, "yet life expectancy is just below 80."

Leonhardt writes that one reason for the spending discrepancy is that many foreign governments "provide universal insurance."

Although many experts target administrative costs, which account for 25% of health spending, as a significant factor behind rising health costs, Leonhardt notes that they "aren't the main story" and that administrative costs account for 15% of spending in many of Europe's single-payer health systems.

In addition, health spending on the elderly in the U.S. -- where administrative costs under Medicare are "roughly as low as those of other countries' universal plans" -- "is similar" to spending on the elderly in other countries, Leonhardt says.

"So something beside administrative costs is at work here, and it seems to involve a basic cultural difference," Leonhardt writes, adding, "Americans seem to be less willing to take no for an answer and more willing to try almost anything, no matter how expensive or how slim the odds to prolong life."

While some U.S. health spending has resulted in medical advancements that benefit both Americans and people in other countries, "much of it is simply wasteful," Leonhardt writes.

"Expensive procedures ... are often no more effective than basic ones, according to research," and "[y]et doctors can keep on getting reimbursed for the expensive ones," Leonhardt writes.

"We Americans tend to treat any rejection of a health claim as some conspiracy by insurance companies, the government, doctors and the pharmaceutical industry," he adds, concluding, "One way or the other -- wisely or capriciously -- we will end up restraining health care spending.

In fact, we are already doing so. That's why there are 47 million Americans without health insurance" (Leonhardt, New York Times, 10/18).