The US has 5 times the Population of Britain while Spending 15 times on Health Care than the NHS

Posted by PITHOCRATES - September 23rd, 2012

Week in Review

The British are successfully cutting their health care spending.  The NHS is stronger financially.  Even running at a budget surplus.  But it wasn’t easy getting there (see NHS trusts in debt double in year by Nick Triggle posted 9/19/2012 on BBC News Health).

The Audit Commission report said 31 trusts posted a deficit – more than one in 10 of the hospital, mental health and community trusts in the NHS.

The figure is up from 13 the year before.

However, overall the health service posted a £2bn surplus – about 2% of its budget.

The development comes amid an unprecedented savings drive.

The health service has been told to save £20bn by 2015 – the equivalent of 4% a year.

If you crunch the above numbers and convert into US dollars the NHS annual budget comes to about $162 billion.

According to Kaiser total American health care spending came to about $2.6 trillion in 2010.  Most of which the private health insurance industry paid.  Which is about 15 times what the British spend on health care.  Even though we only have about 5 times the population of the UK.  That means that either the British are much better at delivering cost-efficient health care.  Or a lot of people go without health care in the UK.

One would have to assume that once the Americans turn over all health care spending to the government their spending will have to be brought into line with British expenditures.  Because few can do national health care as well as Britain.  So based on population US spending should be 5 times the British spending.  Or $810 billion.  Which would call for a cut of $1.79 trillion in annual health care expenditures.  Or about 69% of current spending.

Standard and Poor’s said the US needed to cut spending by $4 trillion over 10 years to prevent a downgrade of their sovereign debt rating.  Or $400 billion a year for 10 years.  And they couldn’t do it.  The government could not make these spending cuts.  And S&P downgraded their sovereign debt rating.  If they couldn’t cut $400 billion they will not be able to cut $1,790 billion.  Which means when the private health insurers stop paying these health care costs they will go straight to the deficit.  Perhaps doubling or tripling our current trillion dollar deficit.  Resulting in a handful of new credit downgrades.  And completing the transformation from world’s number one economy to banana republic.


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