The Chart That Explains Everything That Is Wrong With The US Healthcare System

Tyler Durden's picture

We previously presented the following chart from Citi in our report on America's brief flirt with income statement austerity, although we feel we may not have emphasized it enough. So, in an attempt to remedy that situation, here is the chart that casually explains most if not everything that is wrong with the US healthcare system, currently the cause of so much political bickering and consternation... not to mention future spending.

PS. And if the chart above is not enough, here is a comparison of healthcare outlays both past and present and revenue streams, which, in the words of Citi "will unravel most any other
structural changes in the budget given enough time."

We bring up these charts again as today we are precisely 5 days away from the dead ceiling legislative (not financial) deadline, and DC is likely to come up with a straw man compromise that merely kicks the can down the road yet does nothing to resolve the main issue: America's doomed "welfare state" going concern as indicated by the above charts. It also confirms another observation: responsibility for America's untenable spending picture lies not only with D.C. - it really begins and ends with each of us.

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thatthingcanfly's picture

I am stunned by the revelation that our life expectancy is so low when compared to other Westernized nations. I notice casually that the socialized medicine experiment that libertarians love to complain about in the UK seems to be doing better than I'd like to admit.

Andrei Navrozov had a sobering article in Chronicles last fall about his trip to London from Palermo to seek treatment for a life threatening illness. His conclusion: "I am alive becaused of socialized medicine." Not what one expects to read in that mag.

There are an awful lot of variables to isolate here.


redpill's picture

This is what happens when you combine a situation wherein:

1) US Drug Companies lead the world in new pharmeceutical discoveries that they fund through (over)charging substantial amounts domestically even though the formula will be copied and distributed inexpensively abroad.

2) We have an utterly absurd health insurance regulatory regime that destroys the benefits of economies of scale by preventing practice across state lines, destroys the cost benefits of competition by being tied to employment, and destroys any ability for risk management by a lack of tort reform and giveaways to the trial lawyer lobby.

3) The true costs of a massive Medicare social safety net are cryptically passed through to regular consumers because of myopic government price fixing, which adds yet more additional cost to the entire process.

4) Generations of Americans growing up under the diabetes-inducing food pyramid that tells parents to cram two servings of relatively nutritionally vacuous but carb-heavy bread and grain down their children's throat every single meal.  Combined with a fast-food culture that results in painfully unhealthful eating habits, and it's a wonder Americans live as long as they do.


hedgeless_horseman's picture

The low life expectancy at birth in 2009 is almost entirely due to obesity rates in the US versus the world.

BMI tests for SNAP, please.

Missiondweller's picture

My thoughts exactly. Obesity increases risk for all types of disease from cancer to diabetes. I'm sure both of these graphs would be "normalized" if we had similar obesity rates. Costs would be down and results would be better.

chunkylover42's picture

It's not just obesity, it's lifestyle choices in general like drug use and sedentary lifestyle.  Plus we have a higher murder rate than other countries such that inner city youths are constantly killing each other.  This skews the life expectancy numbers downward.

As for the average spending figures, other countries with government-run health programs can put limits on spending, particularly as it pertains to pharmaceuticals.  Typically those countries look only at the marginal cost of the next pill/injection and ignore the development costs, so they tell Pfizer et al that we'll only pay you $x per pill even though te cost to develop was $3x.  The result is that the drug cos make up the difference by charging US costumers a premium to recoup costs.  We are subsidizing the world in terms of drug development.

dolly madison's picture

I think it is the MSG (also known by other names to achieve a "clean label") in the food that is causing the obesity.  Studies show it increases BMI, increases amount eaten and increases speed of eating.  A recent study showed that children who ate candy regularly, were 25% less likely to be obese, so sugar probably isn't the culprit.  Fat probably isn't either as obesity only increased during the period when low fat diets were pushed so aggressively.  I personally find that having enough fat in my diet keeps me satiated, so I eat less. 

Here is a list of body functions that MSG may affect:

Additionally, many cancers have glutamate receptors, so MSG is miracle grow for tumors, and because MSG can cause a Taurine deficiency, it can lead to heart disease through increasing levels of homocysteine.

Actually many of the problems MSG causes can be counteracted by taking a Taurine supplement, so if you do want to stay on the corporate chow diet, best to take some Taurine.

European countries limit the amount of additives in the food.  The US doesn't.  If it's on the GRAS list, the food manufacturers can put as much in as they'd like.  If you look up the "hidden sources of MSG" and then read the food labels, you will be shocked to see how hard it is to avoid added MSG.

Some will say it can't be the cause of the obesity epidemic because Asian countries tend to add MSG to food and tend to be thin.  First, they probably don't add it to almost every single meal and snack like is the case in US corporate chow.  Also, their staple is rice instead of wheat, and rice just happens to be naturally much lower in glutamate than wheat, so still their levels of ingested glutamate is probably much lower than the typical US diet.

I personally lost 18 pounds in the year that I cooked all our foods from scratch.  I ate plenty of foods that would be thought of as fattening in that time.  The difference was I cooked them at home to avoid my daughters allergens, but that also helped me avoid added glutamate.

I think that many other non-foods like preservatives, artificial flavors and food colorings are probably bad for our health too, and again the amount allowed to be put in foods is not limited here.  However, if you avoid MSG, you will end up avoiding the other bad things too.

A sedentary lifestyle is shown to contribute to health problems as well.  I've long been irritated by how our country has zoned most residences to be far from work, so we are all forced to drive all the time.

So, to get our numbers better on that chart, we need to copy the countries with the better numbers.  We need to limit the additives and change our zoning, and single payer healthcare sounds like a great idea too.

samslaught's picture

I would have titled this article "chart that explains almost nothing."  I would say outside factors (like our countries diet) not only have an impact on the results of this chart, but actually completely explain away the foolish conclusions drawn by the writer of this article.


AchtungAffen's picture

Yeah! It's not that the US has a healthcare system designed not to cover people's health but to give a profit for someone from the managerial caste; it's that the US people are FAWT. That's why they live less and have more costs... And now for a message from the merchant caste:

"Buy Glox Healthcare stocks! We put market capitalization over health any day!"

chunkylover42's picture

If you don't think somebody's choice to have McDonald's and KFC 5 times a week and watch American Idol instead of going for a bike ride (and doing this for 30 years) has no impact on health care costs over their lifetime, you are kidding yourself.

Also, care to guess what the typical net profit margin is for a health insurer?  It's about 5%.  The operating margin is typically around 10%.  Wildly profitable?  Hardly.

samslaught's picture

I would have titled this article "chart that explains almost nothing."  I would say outside factors (like our countries diet) not only have an impact on the results of this chart, but actually completely explain away the foolish conclusions drawn by the writer of this article.


GoinFawr's picture

"It's not just obesity, it's lifestyle choices in general...We are subsidizing the world in terms of drug development."

If you want a priapism mb.

Good thing your fat asses don't have to 'patent prices' for insulin, hey? Now who came up with that again?

Also, when US citizens get their prescriptions filled in Canada Canuckians are the ones subsidizing them. Because Canadians actually pay big pharma full over price for brand name drugs, but the diff is made up by their gov't. Which also means that Canucks, plus a lot of other nations with UHC, are actually subsidizing US drug companies who are supported by outdated patent law.

In other words: the exact opposite of your erroneous claim.


chunkylover42's picture

If you input "Canadian drug price controls" into Google you will find a wealth of information that completely refutes your erroneous claim that the CD government pays "full price" for brand name drugs.  They do not, and the cost is shifted to U.S. consumers.



GoinFawr's picture

According to the Fraser institute Canuckistanians are paying almost twice as much for generic prescription drugs.

You didn't answer my question.


Fox Moulder's picture

Aren't Brits and Germans (and possibly other European countries) as obese as Americans?

long-shorty's picture

Great post. Whoever junked this is suffering from terminal stupidity.

(from a former M.D.)

Mike2756's picture

agreed. massive cuts are coming. maybe it will wake folks up so that they will take better care of themselves.

Zero Govt's picture


You are talking unbridled crap about Britains diabolical NHS (State healthcare). The microscopic exception you quote of someones life being saved by the NHS is completely overwhelmed by the constant damage to peoples health the NHS does with it's usual State run incompetence. No amount of money, and Labour pissed away £Billions extra, can stop this sloppy State sham system wounding, poisoining and killing people by the tens of thousand each year.

When an ex-NHS Trust manager did a survey he found NHS hospitals killing and maiming people and not even recording (caring) to monitor their diabolically dangerous quaility of service. In good cover-up-job Statist fashion (fascism!) the Health Dept and Health Regulator (asleep at the wheel again!) dissed the survey, the Heatlh Trust running the killer hospitals threatened to sue.

A survey of Welsh NHS hospitals found you had a 1 in 10 chance of being injured by their equaly tragic hospitals, even if you weren't a patient but day visitor! A lifetimes smoking carries a 1 in 120 chance of injury. Which does the Dept of Health slap warning and health signs over, the ciggy packets or their 10 times more dangerous (in a day versus a lifetime) NHS hospitals?????

State run anything is like a Circus Clown Show without the funnies, just all the mistakes. You are talking/quoting out of your arse which is precisely where Westminster does all its 'healthcare thinking'. The NHS is not national health, it's a sad, dangerous, expensive 60 year long national joke we can no longer afford

karzai_luver's picture

the usa sure as hell can't afford it either.


YHC-FTSE's picture

God save us from Daily Mail readers. 


My girlfriend is a doctor for a major London hospital and I have a dozen or so friends from uni in the same line of work. You are talking absolute bollocks, and the alternative to the NHS is American healthcare - the cunt of all healthcare systems designed to do one thing: Profit from people's suffering. The NHS always needs improvement, but changing healthcare to a profit motivated enterprise is not the right way. Every stat I've seen concurs with that conclusion and I've done enough posts on that subject to bore anyone to tears.

Zero Govt's picture


great multi-choice you offer; the UK's NHS (State run shite) or the US's model (Govt/Private monopoly /fascist carve up run shite)

there is an alternative my little narrow-minded Marxist. You may not of heard of it being a State educated zombie clone, it's called the 'Free Market' (ever heard of it in school?) and it's the ONLY model in history that works... clearly neither the UK or US's State mangled/monopolised pieces of collapsing crap do not, both of which have had decades of 'testing' and run up decades of 'Fails' 

...but let's not deal with reality, let's let reality catch up with both... both systems are going bankrupt as we speak (great system you endorse)

HungrySeagull's picture

And hospitals continually eviscerate themselves with cost containment while trying to be a Level One trauma center to the world. 5 nurses per patient each hour, monitored beds, special rules such as Not feed by mouth, negative room pressure, isolation, no contact (Gloves etc) etc etc etc Finally capped by a Staff that have a few doctors at the top working days straight with no sleep followed by RN's who dump unwanted work onto the LPN's who dump the really bad work (Bed pans and wipe asses) onto the CPN. Everyone else including the ward clerk who gets all the papers good and bad are at the bottom.


Families sit for hours in the ER with a boo boo or a cough because they cannot afford a doctor. In the meantime drug cases and other wasteful resources are expended trying to save lives better off cast aside into Hospice.


Soon enough entire floors are shut as only medicare/medicaid paitents fill the place, unable to pay for anything meaningful. Essentially a death warehouse. I have seen a entire ward with lights out, beds rolled up and absolutely bare with room for 200 patients.

But considering the staffing requirements, where are you going to find the qualified skilled help and pay the same anywhere from Minimum wage all the way to 50+ hour 24/7? and have them do the paper work with a pencil instead of the very expensive computer networks and monitors?


If you watch the movie "Tora Tora Tora" or Pearl Harbor you will see a big hospital get flooded by casulties very quickly. A lipstick and decisions divide the dying, dead and those who can be saved.


Again, it is much easier fix a automobile or 18 wheeler/airplane/train whatever... in a shop with pricing etc and parts in advance than it is to fix a human with unknown costs until the true billing arrives in the mail.

Some of these costs run into the tens of thousands per day, to buy that patient a time to surivive horrendous injuries or sickness.


Ask yourself what value is your life and how much are you willing to liquidate for a few extra days, weeks or months?


It is far easier to work with a decent set of tools, a first aid kit and what you learned by experience on the side of the interstate waiting for the EMT's to arrive. You don't always save them all. When God is pulling on one shoulder, you must let go of the other.

skipjack's picture

Jeez, who's the ignoramus who junked you ?


The only thing I'd add to #4 of your post is that HFCS is another good reason the wide butts are getting wider.  Then I'd add a #5 and blame a bunch of the cost on defensive, ie fear of lawsuit medicine.  No socialist healthcare regime fears lawsuits.

masterinchancery's picture

These life expectancy stats contain tens of millions of illegals and other people born in 3d world countries who received no prenatal care,and have much lower life expectancy, so they are not representative of those citizens who grew up in the US.

The main problem with the US healthcare "system" is that there is a system; everyone should be responsible for his own health and healthcare.

Lord Koos's picture

"US" drug companies are really multinational.  Much basic research is done free to them courtesty of the American university system.  And it's not the food pyramid that is causing the problem, it's stuff like fried potatos and corn syrup that are causing obesity and diabetes... you don't get these kinds of problems from eating whole grains. I don't see corn syrup on the pyramid.

PD Quig's picture

No, this is what happens when you look at statistics that include factors that have nothing to do with the health care system...such as homocides, soldiers dying in wars, etc. This life expectancy canard has been making the rounds for too many years and needs to be called for what it is: an bald-faced attempt to paint the US in a worse light than is warranted.

The health care problem doesn't start with each one of us. Give people the incentive to economize by removing govt restrictions on the types of coverages available, where policies can be purchased (i.e., across state lines), and what kinds of care is mandated (I don't want to pay for a policy that includes sex change operations), and you will see "each one of us" start to respond rationally to market signals.

Get government the fuck out of it and it will improve dramatically in both quality and cost.

fockewulf190's picture

Another reason which can´t be overlooked is the very high salaries US healthcare workers get compared to other western nations.  In Germany for example, a physical therapist earns about €2200 a month before taxes for a 40 hour work week.  Nurses also work for a similar amount.  Compare this to my sister, who is a nurse in a clinic in Georgia.  Her salary alone would easily cover the cost of 4 fulltime nurses over here.  Likewise, my cousin is a PT working in a rehab hospital.  She makes about 120k a year.  That would cover about 3-4 PTs over here. 

PulpCutter's picture

Redpill, clinicians can practice across states lines, and health insurance can be sold across state lines (in fact, most Americans have insurance with a company that is based in another state).

So what's really going on?  Here's a recent explanation from Ezra Klein:


The big Republican idea to bring down health-care costs is to "let families and businesses buy health insurance across state lines." Jon Chait has some commentary here, but I want to simplify a little bit.

Insurance is currently regulated by states. California, for instance, says all insurers have to cover treatments for lead poisoning, while other states let insurers decide whether to cover lead poisoning, and leaves lead poisoning coverage -- or its absence -- as a surprise for customers who find that they have lead poisoning. Here's a list (pdf) of which states mandate which treatments.

The result of this is that an Alabama plan can't be sold in, say, Oregon, because the Alabama plan doesn't conform to Oregon's regulations. A lot of liberals want that to change: It makes more sense, they say, for insurance to be regulated by the federal government. That way the product is standard across all the states.

Conservatives want the opposite: They want insurers to be able to cluster in one state, follow that state's regulations and sell the product to everyone in the country. In practice, that means we will have a single national insurance standard. But that standard will be decided by South Dakota. Or, if South Dakota doesn't give the insurers the freedom they want, it'll be decided by Wyoming. Or whoever.

This is exactly what happened in the credit card industry, which is regulated in accordance with conservative wishes. In 1980, Bill Janklow, the governor of South Dakota, made a deal with Citibank: If Citibank would move its credit card business to South Dakota, the governor would literally let Citibank write South Dakota's credit card regulations. You can read Janklow's recollections of the pact here.

Citibank wrote an absurdly pro-credit card law, the legislature passed it, and soon all the credit card companies were heading to South Dakota. And that's exactly what would happen with health-care insurance. The industry would put its money into buying the legislature of a small, conservative, economically depressed state. The deal would be simple: Let us write the regulations and we'll bring thousands of jobs and lots of tax dollars to you. Someone will take it. The result will be an uncommonly tiny legislature in an uncommonly small state that answers to an uncommonly conservative electorate that will decide what insurance will look like for the rest of the nation.

redpill's picture

You're going to quote Ezra Klein on healthcare?  Go fuck yourself.


Global Hunter's picture

Lifestyle, diet and stress are but 3 examples of more important factors/variables in regards to life expectancy than nationalized healthcare.  Healthcare is crap either way unless you have some dosh kicking around to get to the front of the queue. 

John Rotten's picture

Exactly.  We have got a bunch of lard asses scrafing down burgers, fries, and a large sugary cola multiple times a week and finishing that off with handfuls of oreo cvookies or ding dongs all while they laze around taking in American Idol.  Additionally, those Europeans take 3+ weeks of vacation (some up to six weeks annually I believe) annually while many Americans don't take, or even get, a full two weeks.  When you do decide to take a vacation for longer than a day or two, you are oft given a guilt trip instead of taking a real trip. 

Oh regional Indian's picture

Johnny, isn't it obvious? Americans have been made to believe that every day is "relaxed, I love my work because a chart on my wall says I do", Thank God it's Friday, every weekend is tackign on the JEt Skis and off on a vacation in your trailer home or $55 specias on South West to is sold to them as a holiday. Why would you need a vacation.

India used to work six day weeks. And get 45-60 day vacations. Now, corporate cogs follow the American System. 

Your frustration with the situation is evident! ;-)


Whoa Dammit's picture


Americans will never be allowed to have much vacation time. If workers had a long vacation they might have time to think. If they thought, it would probably be about how much better they feel not driving in horrific traffic to work at their crappy little jobs of making some CEO that they never have and never will see extremely rich, while they themselves live in a cookie cutter subdivision surrounded by obnoxious neighbors, half of whom don’t speak English, and have just enough money left over from their paychecks after bills and taxes are paid to “invest” in retirement funds that are robbed by Wall Street bankers.


HungrySeagull's picture

Fucking A!

Take a vacay? You get replaced.

I worked pretty hard as a temp until medical issues finally stopped my work for surgeries etc. I had months in which to think. And that was before discovering Zero Hedge which basically discarded wasteful thinking and added very good ideas.

A Nanny Moose's picture

Diet and Lifestyle indeed. I like to simply compare the way we watch sports in the US vs. Europeans.

US: We drive to stadiums, plop our asses down in a chair, eat hot dogs, and drink cheap beer, brought to us by the peanut vendor, while watching simulated mooshine runs on a giant paved oval. Feel free to substitute your favorite sport here.

Europe: They chase bike races around the country, camping along the roadside, some riding their bikes up Hors Categorie climbs, to find the best vantage point from which to view the race, or run alongside racers in a devil costume, or speedo. Often, they will carry enough food to last till race, and schwag caravan passes, and aint hot dogs, and chili-cheese fries.




trav7777's picture

nice cherrypick there.

How about fuckin soccer, moron?

Debt Rolling's picture

"I am alive becaused of socialized medicine."

Are you sure it has something to do with socialized medicine, and not technology/people which were not available in his country? 

Ultimately, medicine is technology. Not anything else. People don't go to a hospital to spend some good time or to get empathetic comments. They want their problem (the root, not the symptoms) gone. 

The solution to illness is not empathy or solidarity, it is brute science. 

By the way, I agree that socialized healthcare system is wonderful (for those who don't have to pay for it). I lived some years in France. Everybody gets free appointments, free everything. But you can't imagine the amplor of squandering, abuse and hippies who profit from the system like it is really free, who go to the Urgencies for a headache or a cold. And I'm concerned about the financial viability of this colossus... seems like a Ponzi scheme. Works great now, but the bills are to be paid later. 

RichardP's picture

The solution to illness is not empathy ... it is brute science.

Given all the pathogens in the environment, the basic question of science and medicine for a long time is not why do we get sick.  Rather, it is why do we stay well.  We have come to understand that, in many illnesses, it is the breakdown in the mechanisms responsible for us staying well that are responsible for the illness.  Part of what keeps us well is feeling understood and having proof that we are part of a larger group of people who all care for each other/care about each other (why are you here?).

On the whole, women tend to feel more connected with other people than men.  That fact is often used to explain why women tend to live longer than men.  The art of healing is sometimes more art than science.  Ask a doctor; they will not likely disagree.  There are many instances where doctors cannot explain why a person got well.  The answer in many instances can probably be found in discovering why the person's  wellness defense system broke down in the first place.  In many instances, repair that defense system and the body will heal itself.

Finally, Google "placebo effect" and skim over some of the recent research into placebos.  For example, see this:

Because emotions do play a role in why a person loses the ability to stay well in the face of all of the pathogens we are constantly exposed to, we cannot say arbitrarily that empathy plays no role at all in the healing process.

Moe Howard's picture

We must remember we are importing third world people in poor health and adding that variable to our statistics. They pay nothing in and are in poor health. Every person in Mexico with a child that has a major disease or birth defect runs across the border so we can take care of him or her. In addition, we count in premature births that do not survive - the Europeans do not. Finally, be very careful with health care statistics in the USA - about 5 years ago the CDC released a report listing us as 34th in the world - turned out it was totally manipulated by not counting large portions of the USA. Of course the retraction did not get the attention the original release did. I downloaded the spreadsheets myself and saw what they did. Someone should have be fired or gone to jail for fraud over that one. We do have socialized medicine right now. The US Government totally controls about 50%, and they cost shift from that 50% to the private insurance 50%. That's how you get the huge bills when you actually pay and aren't a sponge.

A so called "non-profit" that runs Kentucky's Medicaid program as a subcontractor [how can you be a non-profit and a subcontractor - seems to be a scam, right?] was just audited and cited for huge salaries, using limos, buying presents for people with no explaination, trips to resorts and Vegas hotels, etc. It's called a scam, not a non-profit. The amazing thing is taxpayers voted to have MORE of the health care taken over by these gangsters.

Lord Koos's picture

It doesn't matter how good the medical technology is, if the delivery system of that technology sucks.  If you think emergency rooms in the EU are abused, you need to take a look at ERs in the US, which are the last resort of millions of uninsured Americans.

gwiss's picture

There is very little relationship between health care spending and results, because health is for the most part determined by diet and lifestyle.  Check out this graph:


It shows that you rapidly max out benefits from health care expenses, with an elbow at around $500 per capita per year.  At this point you have maxed out any benefit from medication and surgery.  Any more, and you are simultaneously fighting against the disease that affluence causes -- sedentary lifestyle, inadequate sun exposure, junk diet full of empty calories, ubiquitous exposure to carcinogens.  That's why Cuba's life expectancy is exactly the same as Denmark, even though Denmark spends $2743 per person per year while Cuba spends $186.  In other words, there is no correlation between health care money spent and life expectancy beyond simple medical care, regardless of what political or economic system you use to distribute the care.

Rusty_Shackleford's picture

Please consider the graphs in this article.


As others have said, using "life expectancy" as the arbiter of what constitutes quality healthcare is a non-sequitur.

gwiss's picture

Earlier diagnosis always seems to artifically shift the survival curve, bud.  Doesn't actually mean squat.  The only real final test is if your people actually live longer, because that's where the rubber meets the road.  If US cancer care is so good, can you explain why that isn't translating to US longevity being the highest in the world?



Rusty_Shackleford's picture

I'm guessing you're too lazy to read the dozens of posts on this thread that explain this quite clearly.


If US cancer care is so good, can you explain why that isn't translating to US longevity being the highest in the world?

Let me put it in a form you can understand.


People die of other things besides cancer.

GoinFawr's picture

Chile, providing the same life expectancy as the US at 1/7 the cost.

gwiss's picture

Right.  Hence the other part of my post that talks about diseases of affluence.  Which you were too lazy to read yourself.