Healthcare Business

Who Lives the Longest - Countries With the Most and Least Effective Healthcare

Here is the sad fact about health care: there is often little relationship between what is spent on medical care and the results.

Nations like the US, which not only have huge health care budgets but costs that are rising rapidly, rank poorly in areas such as longevity.  South Koreans live longer than Americans on average, and in most cases more than people in the other 34 countries measured by the Organization for Economic Co-Operation and Development. Meanwhile, South Korea spends very little on medical costs compared to its GDP. In general, countries with low obesity, smoking, and drinking rates have populations which live longer, regardless of whether they have privately funded or publicly funded healthcare systems. Their populations may visit doctors a great many times a year, or rarely. None of these things improves longevity as much as a healthy lifestyle appears to.

That being said, there are exceptions to the rule – nations with poor habits and acceptable health outcomes.In some countries, people stay healthy because they visit the doctor often. In others, it only leads to greater public expense. Culture appears to play a part as far as unhealthy behavior. For example, the Japanese lead much healthier lifestyles than Americans, as evidenced by their minuscule obesity rate – 3.8% compared to 34%  seen in the U.S. The American health care system is certainly fighting an uphill battle against the nation’s expanding waistlines. Nevertheless, national health care systems should not be let off the hook because of poor eating habits. It is the responsibility of these systems to discourage poor behavior through financial incentives and public health campaigns.

The data on health care costs and longevity should press national governments to prioritize encouraging citizens to adopt healthy habits early on. That would almost certainly bring down costs more than moving from private health insurance programs to public ones or vice versa. It would also attack the problem of chronic disease at its roots and not at a much later stage in a person’s life when he or she is 70+ years old and infirm.

The OECD argues persuasively in a recent report that the debate over health care has focused too much on the structure of health care systems.

“The empirical analysis suggests that there is room in all countries surveyed to improve the effectiveness of health care spending; there is no health care system that performs systematically better in delivering cost-effective health care – big-bang reforms are therefore not warranted; increasing the coherence of policy settings, by adopting best policy practices within a similar system and borrowing the most appropriate elements from other systems will likely be more practical and effective to raise health care spending efficiency.

This set of  conclusions argue that the debate over health care systems should focus more on results than structure. The recent fight about US reform did not, for the most part, bring about laws which based medical care access on healthy living. Perhaps the idea is too discriminatory and not in keeping with democratic principles. That does not prevent it from making sense.

There are a few other points from the research that should serve as guidance for health care policy. One is that people with access to inexpensive health care often see doctors with impressive regularity. In many cases, this is an unnecessary expense, which binds ease of access and overuse. This is only an educated observation, and the case can be made that frequent visits are worth the cost. 24/7 Wall St. surmises it truly depends on the country, health care system structure, and culture. The same applies for most other health expenses and indicators. For example: Japan, which rates as the most efficient health care system on our list, has by far the longest average hospital stay per admittance, 18.8 days. Meanwhile, Israel, which ranks as the second most efficient, has the third shortest stay – only 4.2 days per person.

Heath care costs were 6% of GDP in 2010  among the 34 nations measured in the OECD report. It should me noted that the ratio will almost certainly increase around the world as the population ages. The US is not the only nation that will have to worry about how it will cover the medical costs of citizens as they get older as younger people need to bear the tax burden of government health care systems.

This data is only available for countries in the Organization for Economic Co-operation and Development. With a few exceptions, notably China and Russia, the 34 OECD nations we rank can fairly be considered a proxy for the developed world. There were some nations, such as Turkey, Mexico, and Chile, which spend very little on care, and have poor results. These countries do not have inefficient care. Merely, they have an absence of care.

In order to determine which nations had the most and least effective health care systems, 24/7 Wall St. ranked countries based on how much is spent as a % of GDP on health care, both public and private, and compared it to average life expectancy from birth in those countries. A country with relatively long life expectancy and relatively low costs as a percentage of GDP were considered more effective than those with relatively short life expectancy and relatively high costs. 24/7 Wall St relied heavily on the OECD Health Care Systems: Efficiency and Institution report. Information on old age spending and sovereign debt ratings came from Standard & Poor’s. We then considered a variety of data to paint a full picture of each nation’s health care system, both in terms of costs and effective maintenance of the country’s health.