We're Not the Only Ones with a Health Care Inflation Problem

The Wall Street Journal had a thoughtful piece on Friday about how France is having trouble coping with runaway medical inflation. Maternity wards are closing, and copayments are going up to try to tamp down demand. Patients are aghast at $2/hour parking at some health care facilities. It seems a different world than when Michael Moore filmed Sicko. The journal shows cumulative health care inflation in the UK, US, France and Japan since 1992.

A better way to look at this would be showing cumulative health care costs over some recent period. I've taken OECD data (as reported June, 2009, using purchasing power parity and adjusting all costs to 2000 dollar values to account for inflation and relative wealth of countries. I have used excel to autofill 2008 results for some countries based on 2000-7 data). You can see that this shows that health care inflation is pretty much a problem everywhere - and the slopes are pretty consistent. There are a few countries with much higher health care inflation than the US (Slovakia, Korea, Greece) - these have generally had high growth rates.

The most striking thing the first chart shows is that the US starts at such a high cost that even if our inflation rate is not the highest in the world, the absolute impact on our economy is substantially greater than in other OECD countries. (Note that from 2000-2007, health care inflation in France has been substantially lower than in the US).

Double click on the charts below to enlarge.