The Economics of Health Care
The United States spends more per person on health care than any other country in the world. Still, recent studies show that the United States ranks rela- tively low in the overall quality of health care provided. France is often described as providing its citizens with the globe's best health care. Japan wins the distinction as having the world's healthiest people. Although good at expensive care, like open-heart surgery, the U.S. health- care delivery system is often described as poor for low-cost preventive care. Measuring how long people live in good health, and not just how long they live, the Japanese beat Americans by 4.5 years. Yet it is surprising that Japan spends just $1,750 per person on health care, and France spends $2,100. Both figures are far below the standard set in the United States, where health-care spending was a whopping $3,724 per person in 2001.
A. Why is health-care demand different from the demand for many other services?
B. Consumers buy health care to improve their health and well-being, but research suggests only a weak connection between health-care spending and health. Explain why there might be only a weak link between health-care expenditures and health.
C. Why is health-care spending rising rapidly on a worldwide basis? Is robust growth in health-care spending likely to continue?