Austin Frakt asks a question:
Austin Frakt: What happened to US life expectancy?: “Apart from the explanation or lack thereof, I also wonder how much welfare has been lost relative to the counterfactual that the US kept pace with the OECD in life expectancy and health spending. It’s got to be enormous unless there are offsetting gains in areas of life other than longevity and physical well-being. For example, if lifestyle is a major contributing factor, perhaps doing and eating what we want (to the extent we’re making choices) is more valuable than lower mortality and morbidity. (I doubt it, but that’s my speculation/opinion.) (I’ve raised some questions in this post. Feel free to email me with answers, if you have any.)
Relative to the OECD average, the U.S. spends an amount of money equal to $1.6 trillion a year extra on health care, and lags in life expectancy by 2 years. If we had kept pace in health spending, we would have $1.6 trillion extra to spend on useful things–and those things would have been worth $1.6 trillion a year. The value of longer life is harder to guesstimate. One way to approach the question would be to simply assert that we combine lifespan and health with goods and services to produce extra utility–say an extra $32 trillion a year of utility–and that with if we had 1/40 more time we would be able to get another $0.8 trillion a year of utility.
The total cost of underperformance would then be $2.4 trillion a year: 2/3 of that from resources we could devote to other useful things but are instead devoting to our extraordinarily inefficient health sector, and 1/3 from the fact that even with these extra resources our health outcomes are still very disappointing…