Saturday, February 26, 2005

U.S. and Japanese health care costs -- and lifetimes

Let's talk for a moment about health care costs. In the year 2000, the United States spent a total of $1.3 trillion in health care costs, with a per capita expenditure of $4560. You can find those numbers at the web site for the Centers for Medicare and Medicaid Services.

Now compare with Japan. In the year 2000, Japan spent 30.4 trillion yen on health care. (Available here. According to my lovely, talented, and frighteningly brilliant translator, you can find the number on the bottom line of the file. The “12” is the year 2000 – they date based on emperor – and the “303 583” is 30.3583 trillion yen.) That's 239,200 yen per capita (4th column), or about $2,392. In other words, about half the amount per person the U.S. spent.

Ready for some more fun statistics? According to the 2000 CIA World Fact Book (grab the file), in the year 2000, the U.S. life expectancy at birth was 77.1 years. In Japan that same year, it was 80.7. So it looks like Japanese people are spending half as much on health care as U.S. citizens and living longer.* I have it on good authority that the 2001 numbers are similar, but I haven't been able to find those numbers on the web, so I'm sticking with the 2000 ones for this article.

So what might these numbers mean?
1. somebody's fibbing,
2. Japan's getting much more health care bang for the buck than the U.S., or
3. Japan's population is healthier than the U.S.'s and therefore needs less health care.

Let's set aside #1 for the moment since it probably won't take the discussion very far.

It may be that Japan's getting more bang for the buck. That could be for a variety of reasons. Maybe Japan's drug prices are lower. Maybe its administrative costs for its health care system are lower. Or maybe it distributes health care differently, applying a lower level of care but reaching more people, thereby pushing up the average.

On the other hand, possibilities for a healthier population also leap to mind: diet and exercise, for instance. Maybe Japan has lower obesity rates, or maybe Japanese people spend more time walking and less driving.

My personal guess is it's some combination health care distribution and lifestyle factors, but it would be very interesting to see a comparative study at some point.

* It's true that Japan has an aging population, so their per-capita expenditures will go up in the future. Of course so will their life expectancy, since the population will be weighted toward older folks, but expenditures will probably grow faster than life expectancy. However, that's a separate point for a different day.

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