Ralph Sisson, a loyal MR reader, asks me:
Why do the other first world countries focus on costs more than we do? They also pay for care, for the most part, via insurance. Even countries with the same level of personal income focus more on costs.
Putting normative questions aside, let's focus on the positive comparison. I can think of a few factors here:
1. Americans have the "anything I want, whenever I want it" mentality of consumer spending. Look at Sunday closing laws in Europe.
2. Because of an accident of history, we covered old people first with government $$ and that set a precedent. It's especially hard to say no to people who are close to dying and that got us out of the habit of saying no.
3. Americans are more likely to have a "can do" mentality than are people from most other countries.
4. Americans are more likely to have a self-image of being the richest people in the world and not facing financial limits. We derive more of our self-esteem from this self-image.
5. Compared to some Asian cultures, the more individualistic American approach lends itself to the view that an individual life must be extended at all costs.
6. The U.S. regulatory climate tends to be more pro-business, which in this context means pro-doctor and pro-hospital. Those people are always willing to tell us to do more and spend more and we seem always willing to listen.
7. Tying health insurance to employment makes it harder for people to see what they are really paying and how much it lowers their net wage.
You can try the cross-sectional approach but with France and Switzerland as other big per capita spenders, I am not sure where this leads. The fully governmental systems, such as in the UK, have low expenditures but it's also an open question whether low prices and low quantities will follow from the same explanatory factors.