Some Perspective on Health Care Costs

The demagoguery and fear-mongering surrounding health care policy is utterly mind-numbing.  For as long as I can recall health care policy has been a confusing mish-mash of amazing statistics, horrifying anecdotes, and low-quality quantifications.  The net sum of this mess is a standard narrative we pretty much all accept: at some point we will get horribly sick, be forced to spend months fighting bureaucracies, and in the end, should we live, each day will be a terrible choice between buying needed medication or enough cat food to stave off starvation for a few more hours.

In no way am I defending our health care system, nor would I ever make light of the very real, very tragic situations that befall an unfortunate few.  I agree with just about everyone in thinking that there has to be a better way to take care of ourselves and each other.  But we all could benefit from a little more perspective.

According to the U. S. Department of Labor and the Bureau of Economic Statistics, Americans have some distinct spending habits that do not indicate a preoccupation with the costs of health care.

The average American household has an annual income of about $46,000.  Of that, 34.1 percent is spent on housing (including associated costs such as utilities), 17.6 percent on transportation (including purchases, maintenance, fuel), and another 12.4 percent on food (which includes both groceries and dining out).

Therefore, after basic living expenses that average household still has 35.9 percent of their earnings for other things, including health care.  Naturally, by purchasing a cheaper car, lowering energy bills, and cooking at home, the amount of available dollars would increase.  The average American household spends 64.1 percent of their earnings on housing, transportation, and food – but they don’t have to spend that much.  By the way, this percentages remain pretty stable across the vast territory from the working poor to the upper middle class.

On health care costs, that household spends 5.5 percent of income.  Sure, no one wants to spend money on something as “unfun” as health care, but there it is.  How does it compare with other categories?

Americans spend as much as entertainment (5.4 percent) as health care (5.5 percent).   If you add alcohol to the entertainment total, the percentage rises to 6.4.  Another 5 percent is spent on personal appearance – clothes, make-up, and everything else from a hair cut to a nose job.

Again, I do not want to diminish real problems with health care costs, but if one understands that Americans spend more on movies and beer than on health care, it hardly seems that we are in a state of national crisis.


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