U.S. Health Care: A Reality Check on Cross-Country Comparisons

July 31, 2012

The United States spends substantially more on health care per capita than other developed countries. Based on comparison data of health status, the Organization for Economic Cooperation and Development (OECD) published a report on health system performance, finding that the U.S. system does not perform better than systems in countries that spend less, say H.E. Frech and Stephen T. Parente, adjunct scholars, and John Hoff, a visiting scholar, at the American Enterprise Institute.

These cross-country comparisons, however, are unable to adequately differentiate between health system performance and other confounding factors that determine health. Consider the treatment of the infant mortality rate:

  • Babies who are not viable and who die quickly after birth are more likely to be classified as stillbirths in countries outside the United States, especially in Japan, Sweden, Norway, Ireland, the Netherlands and France.
  • In the United States, however, nonviable births are often recorded as live births, making the U.S. infant mortality rate appear misleadingly high.
  • Indeed, in a detailed study of medical records and birth and death certificates in Philadelphia, researchers found that infant mortality had been overstated by 40 percent, merely as a result of these nonviable births that were recorded as live births.

Critically, this differential between how countries measure infant mortality carries over into more widely accepted metrics such as life expectancy (LE).

  • The OECD uses LE at birth, but LE at older ages is less affected by the measurement, lifestyle, and cultural problems inherent in infant mortality and in LE at birth.
  • Thus, the measurement errors and lifestyle and cultural influences that affect the infant mortality measure are directly imported into LE calculations.
  • As a result of the problems with infant mortality, the difference between U.S. life expectancy and that of other countries is reduced at later ages.
  • This theory is lent credence by the fact that, when LE is measured in later years, the disadvantage that the United States has diminishes substantially.

The final factor used in the OECD study, potential years of life lost, is similarly plagued by inaccuracies that cause it to mislead. Notably, potential years of life lost fails to account for differences between nations that cause premature mortality that are not a function of bad health care, such as smoking and obesity.

Source: H.E. Frech, Stephen T. Parente and John Hoff, "U.S. Health Care: A Reality Check on Cross-Country Comparisons," American Enterprise Institute, July 11, 2012.

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