The Legatum Institute just released its annual Prosperity Index, which ranks 104 countries in the only global assessment of wealth and well-being. It should come as no surprise that the United States ranked quite high overall, coming in at ninth.
In the health category, though, America ranked a weak 27th. In other words, the Index found that America’s prosperity is held back by its healthcare system. This is not because the American people are less healthy then the rest of the world — on life expectancy and infant mortality, the United States does quite well.
Rather, the American health care system has become a victim of its own success. It provides the most advanced health care in the world, so this has led most Americans to believe that every pain can be alleviated and every sickness cured. This demand has driven costs to staggering levels.
For decades, medicine has been the only sector of the economy immune from the consumer forces that drive down prices and improve quality everywhere else. Consequently, America’s healthcare system needlessly drains billions of dollars annually from the economy.
Per-capita healthcare spending is at $7,200 annually — the highest in the world. And costs are rising. National health spending will hit about $2.5 trillion this year, or 17.6 percent of GDP. In a decade, that figure is expected to reach $4.4 trillion!
Americans are getting crushed by these costs. By 2018, higher health expenses are expected to trim $834 billion from employee paychecks at small businesses. Plus, the high-cost of health care leaves millions without any coverage whatsoever.
Yet if the Prosperity Index finds bad news for the United States on health, it also has some promising results in other areas. This success demonstrates that America has the capacity to solve its healthcare challenges.
America ranks second in the world on democratic institutions, which the Index calibrates to civil liberty protections, the political participation of a country’s citizenry, and the transparency and accountability of government.
America also does well in the “social capital” category, placing seventh. This measures community engagement, donations of time and money, the strengths of family and friendships, and whether citizens believe they can trust one other.
America benefits most from its first place rank in the “entrepreneurship and innovation” category, which measures the ease and rate of business start-ups and the prevalence of new technologies.
It is these dynamics that put America at ninth on the Prosperity Index, the highest-ranked large country in the world. These same strengths can help America tackle the health care challenges of driving down costs and improving quality of care.