The United States spends 7.2 percent points more of our gross domestic product (GDP) on health care than several industrialized countries. That is $1.3 trillion the country effectively wastes on health care without getting better health outcomes.
This is such a large amount of money it is almost impossible to wrap one’s head around. But it’s important to highlight just what could be done with that much money.
If the federal government could prevent all this wasted spending and capture the savings, the U.S. could provide everyone universal health care and:
- Double social security payments and have over $400 billion left over (more than enough to cover free college and paid family leave and triple food stamps)
- More than triple the amount the U.S. spends per student on K-12 education
- Eliminate all state and local individual income taxes, property taxes, and sales taxes.
- Quadruple what federal, state, and local governments are spending on all forms of infrastructure (roads, highways, public transit, water systems, rails, etc…)
- Give every adult in America an extra $5,300 a year
- Increase total government research and development across every field by ninefold
- Fund the modern equivalent of 18 Apollo projects at the same time.
Of course, if the country ever ends the incredible amount of price gouging taking place in the American health care system, the money won’t go to one place. The savings would likely result in a combination of thousands of dollars in increased income for most workers via lower premiums/taxes, increased spending on education, investments in infrastructure, and new social programs.
Our health care system is a major source of the upward transfer of wealth and income inequality. Much of the one percent exists because of the country’s extravagant health care prices. In fact, the top two places that members of the one percent are likely to work are physician offices and hospitals.
This also shows the challenge of moving toward a truly universal health care system. The exorbitant cost of health care is the amount of excess money that hospitals, drug makers, insurance companies, and doctors want to keep all for themselves — and they’ll fight for it.
Any new system, even one which eliminates cost sharing, must address this extreme price problem or it will fester. Failure to address the problem will merely shuffle around who overpays the one percent.