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The U.S. doesn't spend less on social care than other developed countries

A new Health Affairs study throws cold water on the idea that the U.S. spends so much more on health care than other countries because we spend less on other social services.

The big picture: Some policymakers and researchers say that the underinvestment in social services has led to a less healthy population, and point to the low U.S. ratio of social-to-health spending.

Between the lines: Instead, our spending on social services as a percentage of GDP is actually greater than the average of OECD countries, and there's a positive correlation between a country's spending on social services and its spending on health care.

  • Forgive me if you've heard this before, but the answer is that we just spend way more on health care than other countries do, which drives down our social-to-health spending ratio and makes us an outlier.
  • And, the authors note, "the US has average rates of utilization, which suggests that this is not likely a key driver of higher health care spending at the national level."

The bottom line: It's the prices, stupid.