In-depth analysis on Credit Writedowns Pro.

The correlation between healthcare spending and life expectancy

Hat tip FiveThirtyEight.

healthscatter.png

once you remove the U.S., there’s a strong correlation between spending and life expectancy, and this is super-clear from the scatterplot.

For more information behind this chart, click the link below.

Source

Healthcare spending and life expectancy: a comparison of graphs – Andrew Gelman, Columbia University

About 

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.

22 Comments

  1. kynikos says:

    Insert platitude about correlation does not equal causation. I doubt health care spending alone causes the variance although some factors correlated to health care spending (but not health care spending) might cause physiological differences. For instance, people with lower social status within developed countries has shorter telomeres, and this does not seem be directly related to health care spending.

    http://news.bbc.co.uk/2/hi/health/5188742.stm
    http://www.ncbi.nlm.nih.gov/pubmed/16856882

    http://www.ncbi.nlm.nih.gov/pubmed/17156082 (for a counterview)

  2. Mark in Chi says:

    One assumes that there is an attempt here to link life expectancy to quality of care. Unfortunately, life expectancy is much more about lifestyle choice than the quality of medical attention one receives. We (as a nation) have one of the highest obesity rates in the world, thank you fast food and sedentary lifestyle. This means more diabetes, heart conditions, and other problems that come with being overweight. No amount of quality health care can overcome an individual that refuses to eat properly and exercise.

    We also shoot/stab/kill each other at a rate that is above much of the developed world, in addition to smoking and drinking. The mortality rate for inner city males aged 16-30 is off the charts compared to suburbian counterparts. Even anecdotally we all know this comes from joblessness, poverty, crime, gang activity, etc. Again, these are things that regular visits to the Dr. just aren’t going to address.

    FYI, infant mortality suffer from it’s own problems when used as a gauge of quality of care.

    IMO, a far better measure of care quality is to look at things like survival rate or length of life following diagnosis of terminal diseases (i.e., cancer). While there is certain to be some component of chance, it at least gives us a more comparable measuring stick across health care systems. Granted, there’s a lot of wasted spending in our current system, and we could start to address that by dealing with all the red tape and beauracracy.

    • You’re reading way to much into this. The only thing this graph shows is that life expectancy and healthcare expenditure are correlated. Nothing more. There is even no proof of causality. You can make conjectures as to WHY there is this correlation, but for me the question is why is the U.S. an outlier.