The Most Efficient Healthcare Systems in the World

According to the most recent Bloomberg Health-Care Efficiency Index, Hong Kong has the most efficient healthcare system in the world, a position it and close runner up Singapore have held since 2009. During the same span of time, Spain and South Korea climbed up to third and fourth place respectively, with Japan dropping two places but remaining at a very respectable fifth.

Here are the full results of all fifty-five countries measured. 

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As explained directly above, the ranking is based on three weighted indicators: life expectancy, relative spending on healthcare (the total amount spent on healthcare as percentage of GDP), and total spending on healthcare (everything spent on medicine, family plan, emergency services, etc.). Thus, it looks at how much a society spends on being healthy, and compares that to longevity, which serves as a good approximation of one’s well being (generally, the longer you live, the healthier you probably are).

By this standard, the United States is in the bottom five nations in terms of healthcare efficiency, and has fared poorly in the index since it was created in 2012. From Bloomberg:

America was 50th out of 55 countries in 2014, according to a Bloomberg index that assesses life expectancy, health-care spending per capita and relative spending as a share of gross domestic product. Expenditures averaged $9,403 per person, about 17.1 percent of GDP, that year — the most recent for which data are available — and life expectancy was 78.9. Only Jordan, Colombia, Azerbaijan, Brazil and Russia ranked lower.

[…]

The U.S. system “tends to be more fragmented, less organized and coordinated, and that’s likely to lead to inefficiency”, said Paul Ginsburg, a professor at the University of Southern California and director of the Center for Health Policy at the Brookings Institution in Washington.

Note that Americans live a relatively long time on average, albeit not by developed world standards. The problem is that our merely decent lifespans don’t seem justified given how much more we spend in both relative and absolute terms compared to countries with longer lived people. Put another way, we’re getting o.k. results for an exorbitant investment.

Granted, Bloomberg does add an important caveat about U.S. healthcare performance: we’ve yet to see the full results of the Affordable Care Act, a.k.a. Obamacare, which, for all its issues and limitations, still managed to successfully expand access to healthcare (albeit not 100 percent).

While the U.S. Affordable Care Act expanded access to health insurance and provided payment subsidies starting on Jan. 1, 2014, its impact on life expectancy will take a while to gauge. That’s partly because health care isn’t the only influence on longevity.

“It has to do with how we eat, how we live, poverty and inequality, social support,” said Jon Oberlander, a professor of health policy at the University of North Carolina at Chapel Hill School of Medicine.

Life-expectancy still is a way of measuring how well, overall, a country’s medical system is working, which is why it is used in the index.

Obamacare’s impact on cost per capita also is difficult to assess for 2014. Health-care expenditures started moderating in 2010 because of the economic recovery and insurance-policy changes in the private sector, Oberlander said.

By contrast, Hong Kong and Singapore are successful in large part because their governments play a stronger role in regulating and providing care, particularly preventative measures such as nutrition. At just $2,386 per capita, their citizens enjoy an average of about 83 years of life. Of course, these are also much smaller countries, although most of the top ten are fairly large in terms of population.

More details about the results:

Cuba and the Czech Republic — with life expectancy closest to the U.S. at 79.4 and 78.3 years — paid much less on health care: $817 and $1,379 per capita. Switzerland and Norway, the only countries with higher spending than the U.S. — $9,674 and $9,522 — had longer life expectancy, averaging 82.3 years.

Chile, the first Latin American economy to join the Organization for Economic Cooperation and Development, is the only country from the continent to have ranked among the top 10, and its life expectancy, at 81.5 years, was the highest.

Rankings for several nations have changed substantially over time because of increased spending relative to the slow pace of improvement in life expectancy. Sweden fell to 27 in the latest index from 14th in 2009 as per-capita spending rose by more than 50 percent. Saudi Arabia dropped 20 spots to 38th as its spending increased by almost 80 percent. Bloomberg calculated an inferred ranking back to 2009 for comparison purposes.

Greece moved up nine spots to 13th, as life expectancy rose by one year and per-capita spending fell almost 40 percent to $1,743 from $2,879. The country is in the midst of an economic crisis that has wiped away about a quarter of its GDP.

Indeed, it is interesting to note that a lot of the top performers are not especially rich and/or economically vibrant. Spain, Japan, and Italy have struggled with sclerotic growth for many years. Argentina, which rose an impressive 22 spots since 2009, has been mired in chronic inflation and poor governance since before that time. Conversely, Germany and Denmark, for all their relative prosperity, are middling in terms of performance.

So assuming you accept the index’s methodology, it appears that there is a lot more to living a long and ostensibly healthy life than how much you spend on healthcare. Maybe the countries that have it right are also offering the right values, diets, and environment (both social and environmental) that are conducive to health. Access to medicine and treatment still matters of course, but it seems to only be a part of the formula.

What are your thoughts?

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