In the popular telling, there is a strong and reasonably constant relationship between health spending and life expectancy.  We can presumably compare countries of “similar” development with eyeball regressions well enough to make strong inferences about the efficacy of a particular country’s health care system1.  I have doubts.


In reality, healthcare is surely subject to rapidly diminishing returns and other factors shape outcomes largely independent of actual health inputs.   Striking as such plots may be, the apparent slope for the United States can be readily predicted based on the relationship observed in other high-income countries with nothing more than time series for health expenditure and life expectancy.   Truth be told, the average marginal effect of health expenditure for high-income countries in recent years is likely pretty close to zero (particularly as pertains macro-level indicators like life expectancy).

The US intercept, meanwhile, can be explained quite well by obesity.  Obesity is likely to have very large negative effects on all manner of health outcomes.  It is actually much more predictive of outcomes in the developed world than health spending.  Indeed, the effects of obesity and related western diseases may be such that the apparent slope on health spending turns unambiguously negative in the developed world in the future (cross-sectionally, even if not in time series…).

Income is a double-edged sword.   Income growth strongly predicts health spending growth, but income growth also predicts rising obesity, diabetes, prescription opioid use, illicit drugs, and likely several other “western” illnesses.  While there probably are some idiosyncratic US factors not explained by current income levels (e.g., deep roots), many of these “American” issues are more widespread and more linked to income than most people appreciate.   The equilibrium between the positive side (esp. healthcare) and the negative side (overeating, drugs, etc) is likely to seriously confound extrapolation from prior experience because of the non-linearities and tipping effects involved with these different processes.