The Health Maw

Obviously, you don’t build a Finnish level of educational performance without the foundation provided by the egalitarian Nordic social/political/economic model. And you don’t build a Nordic welfare state without some taxes. But there are things besides tax rates that make it possible to afford to Finland’s relatively generous social provision. One such thing — lower defense expenditures. But another is lower health care expenditures:


If you can’t read that chart, click over here. It shows that the Finnish system is so much cheaper on a systemic basis than the American system, that public expenditures on health care actually comprise a slightly smaller share of Finnish GDP than they do of American GDP. This even though Finland’s public expenditures on health care are done in a far more egalitarian manner and cover far more comprehensive service.

And of course when private expenditures are factored it, Finland spends dramatically less on health care. And yet, we get little-to-nothing in terms of better health outcomes in exchange for our additional health care spending. The total gap — including both public and private expenditures — frees up almost 8 percent of Finnish GDP for productive investment in education, infrastructure, etc. in a way that allows reasonable robust growth to coexist with relatively high taxes and levels of social provision.

There would be nothing wrong with America spending a huge amount on health care if there were some evidence that it was making us an unusually healthy people, but there isn’t.