High Health Spending in the U.S. Isn’t Being Driven by Low Social Spending

The United States has the highest per-capita rate of health care spending in the world, and the country’s status as an international outlier has been linked to a perceived under-investment in social programs, such as employment, housing and education, which, in turn, has been theorized to harm health outcomes and drives health spending.

But a new study in Health Affairs – part of the National Pharmaceutical Council- and Anthem, Inc.-sponsored “Considering Health Spending” series – calls into question the idea that increased social spending will pay for itself in lower health care bills.

Indeed, the study’s authors, led by London School of Economics’ Irene Papanicolas, PhD, found that social spending in the United States was slightly above the average of other developed nations, and has been growing faster that its peer countries for four decades. Unlike past analyses, the study assessed both private and public social spending; other assessments looked only at public spending, where the United States lags other developed nations.

The positive association between the two types of spending suggests that similar values drive both types of expenditures, according to the paper: “Societies that value spending in areas such as family, old age benefits, education, and incapacity are also likely to value spending on health care services.” The work builds off an earlier Journal of the American Medical Association article that suggested other usual suspects – including higher prices and increased administrative costs – are more likely to be responsible for greater spending in the United States as compared with its international peers.

Read the complete study in Health Affairs.