Special counsel Robert Mueller has finished his investigation, and the 2020 presidential campaign is already heating up. So what’s next on the national political agenda? Yep, healthcare is back.
On this episode of our Numbers Geek podcast, we inoculate ourselves for the upcoming debate by getting an understanding of the key numbers and long-term trends in U.S. healthcare, with some surprise twists along the way.USAFacts, explains the key numbers he uses to understand and track the issue — including overall spending per person, the rate of uninsured, and average age of death (not to be confused with life expectancy, as Steve explains).
Listen to the episode below or subscribe to Numbers Geek in your favorite podcast app, and continue reading for highlights.
Why should people care about the overall state of healthcare in the country?
“Healthcare’s the single biggest part of GDP in this country,” Steve says. “Close to 20% of GDP is spent on healthcare. So it’s big. And if you look at it on the household basis, it’s really big.”
“Now, most people say, ‘Oh no, that’s not true. I don’t spend that much on healthcare.’ But what they’re forgetting is their employer or their government is spending it on their behalf. So if you look at all the money that is used by individuals in this country, by far the biggest piece goes to healthcare.”
Total spending on healthcare goods and services in the U.S., adjusted for inflation, rose from $2,944 per person in 1980 to $9,578 per person in 2016.
The latest government numbers show that the percentage of Americans who are uninsured has fallen since 2010 from 16.3% to 8.8% currently.
- Out of the people who are insured, more than 55% get their insurance from employer provided programs and 16% purchase their insurance directly as of 2016.
- But more than 44% of overall healthcare spending in the U.S. is covered by major government programs, including Medicare and Medicaid, as of 2016. That’s up from 32% in 1980 due to factors including rising costs and increased enrollment.
One way to measure health is how long we live. Oftentimes the metric that’s used is average life expectancy, but as Steve explains, he prefers to look at a different metric: average age of death.
What’s the difference? “Average life expectancy is a forecast of how long somebody who’s born today will live. That’s average life expectancy. Average age of death is actuals not forecast,” Steve says. “Of all the people who died this year, what was the average age at which they died.”
A person born in the U.S. in 2014 was expected to live to almost 79 years old on average. That’s an increase of 4 years over 25 years. In other words, life expectancy was about 75 years for someone born in 1989, 25 years earlier. More recently, the forecast for life expectancy has declined slightly in each of the past three years. This is attributed in part to the effect opioids and suicides. For people born in 2017 the average life expectancy was 78.6 years old, down about a tenth of a percent from the year before. But long-term, U.S. life expectancy is up.
Average age of death: “In the last 20 years the average age at which people are dying has gone up from 72.3 years to 72.9 years,” Steve says. “For all that additional money we’re pumping into healthcare it’s not buying us much additional longevity today. You get those cancer treatments and all of this stuff added together and it’s giving you 0.6 years. Just over half a year.”
Since we spoke with Steve, the latest numbers show the average age of death in the U.S. up by an additional two tenths of a year to about 73.1 years for 2017. But that’s still an increase of less than a year in the average age of death over the past 20 years.
Transparency and costs: “The other issue you have in healthcare is where does the pressure come on the system to reduce cost. If you take a look at any other product, your favorite PC, phone, the consumer’s out there every day buying and they’re asking, they’re demanding lower prices. When somebody builds a lower price device they can see it rise in sales,” Steve says.
“None of that dynamic really works in healthcare. Things are very distributed. Again, we may like our system but it does lead to higher costs and it does lead to a situation which people are not necessarily trading off their money or their employers’ money on their behalf the way they might have.”
What if Steve were running a company with this spending and outcomes?
“I’d probably look at the prices and the costs,” he says. “The pricing and the costing of hospital services, the pricing and costing of doctor services. As well as whether the services that are being performed are providing value. Does all the money that gets spent at the end of somebody’s life really provide extra value or not? If what I’m doing is not buying anybody either more comfort or significantly more years, I’d probably say that’s not a good value and I would work hard to improve that value.”
“For all that to work,” he adds, “you’ve got to have a customer who understands what they’re paying, which doesn’t exist in the way healthcare gets managed and delivered today in the U.S.”
“The number one thing would be for people to have greater emphasis and greater accountability for their own health. This is more my point of view, but when people are making decisions that cause them to be less healthy, and society is paying more money for healthcare, that doesn’t seem right or smart to me. And I think we should put more energy and effort into thinking through how the medical system, and education, can drive people to healthier lifestyles, healthier behaviors.”
Explore more numbers behind U.S. healthcare at USAFacts.