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Spending a lot on healthcare, and most other things, is the American way

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Tyler Cowen writes in Bloomberg News that Americans spend so much on health care in part because they are  traditionally big spenders, not big savers, in most areas of their economic lives.

“As outlined by the blog Random Critical Analysis, U.S. health-care expenditures go well beyond what the U.S.’s relatively high per capita GDP might lead us to expect. But viewed through the lens of consumption behavior, American health-care spending is typical of this nation’s habits and mores. Relative to GDP, Americans consume a lot more than Europeans, and our health-care spending is another example of that tendency.”

“Consumption in the U.S., per capita, measures about 50 percent higher than in the European Union. American individuals command more resources than people in countries such as Norway or Luxembourg, which have higher per capita GDP. The same American consumption advantage is evident if you look at dwelling space per person or the number of appliances in a typical home.”

“{W}e would be better off if we had a less consumerist, more philosophical, and indeed more spartan approach to our health and well-being. That would lead to less over-treatment, less strain on health-care resources, and in the longer run a healthier nation with a sounder fiscal position for the federal government.

“But I just don’t see this nation on the verge of such a change, and so the message here is somewhat pessimistic. Americans love their personal consumption, and household savings rates have been mostly falling since the early 1980s. Those are long-term cultural trends that no health-care policy will reverse. ”

To read Mr. Cowen’s piece, please hit this link.

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