Health care spending

October 6, 2011 § Leave a comment

What does money get you in terms of health? If you look at a graph of life expectancy against per capita GDP — even if income is on a log scale — then the relationship gets weaker as you get richer. On the other, a more relevant x-variable might be health care spending:

This isn’t a surprising graph. The relationship is mostly increasing (with the US an outlier), but returns diminish. Even within the top group, though, three years of life expectancy is practically important. An interesting question is: what explains the differences within that top group? It’s unlikely we can prove causation, but with substantial background knowledge and good data, we should be able to formulate a reasonable working theory.

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