Life expectancy vs per capita spending on healthcare

OECD-2011-final

How would you interpret this graph?

Firstly, don’t think about the line. A linear regression with this kind of spread of the data is just silly and is probably not the best way of presenting a tendency.

What is really important here are the two axes, the spending per capita (person) and the life expectancy. The further up you go, the longer people live, while the further to the right you go, the more the country spend on health care.

So if you draw a line from top to bottom in the middle of the x-axis, you will have all the big spenders on the right and the cheap ones on the left. Which means that we in Norway are joined by USA, Denmark, Switzerland, Canada, Germany and France. While countries like Mexico, Hungary, Korea and Greece all spend very little on health care.

The second line you should draw is from left to right, in the middle of the y-axis. The countries with high life expectancy will be on top and low expectancy will be on the bottom. But notice that most of the countries all lie between 80 and 86, so no matter how much a country spend, the difference is usually no more that 6 years. (Fun fact: the life expectancy in Oslo differs by 4 years between east and west.)

So what you have to look at then, is how well money spent on health care is correlated with life expectancy. Well, “not really”, is the answer to that. And also “this is complicated”. The only interesting outlier here is USA, really. Because Mexico spends very little and has very low life expectancy, so it’s really just the opposite of Norway. While USA spends significantly more that anyone else, but still has a low life expectancy.

What we all should think about is why we in the West (right side) send so much more money than the East (left side), but still have the same life expectancy?

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