U.S. Spends Too Much on Healthcare Not Enough on Social Benefits

Dr. Tony Iton delivered some bad news at the Lenz Clinic last week: Americans are dying sooner than they used to.

By Peter White

NASHVILLE, TN — You can’t escape taxes.  You can’t escape death either but where you live determines how long you will live.

A health care researcher told a crowd of about 100 people at Lenz Public Health Center last week that your zip code is more important than good genes when it comes to life expectancy in the U.S.

“There is a tax to living in a low-income neighborhood and you pay that tax in terms of length of life,” said Dr. Tony Iton, Senior V-P of the California Endowment. It is a non-profit working to expand quality health care in California to the underserved.

As head of the Alameda Public Health Department, Iton studied death certificates and census tracts and found that in 1960 African Americans died 2.3 years before whites. By 2005, the gap had widened to 7.8 years. Iton also found life expectancy was six years less in neighborhoods with high poverty rates.

That proved true in other places like Baltimore, Los Angeles, Seattle, St. Paul, Boston, New York, and Denver. People in one neighborhood died much sooner than people who lived just a mile away. He said that was happening in Nashville, too.

“Everywhere we looked we found life expectancy differences in the same city of at least 12-15 years and in some places up to 30 years,” he said.

Iton said a poverty-stricken neighborhood is an unhealthy place where people lack opportunity. “This is how we essentially segregate opportunity in this country and it manifests itself in length of life and a whole host of outcomes,” Iton said.

“When you see disparities, what you are not seeing are the underlying inequalities that are driving those inequalities and they are structural. They are not about individuals.”

Iton said social policies either steer resources away from neglected communities or there is a lack of policies in the face of abject need. Either way, a narrative of exclusion says some people are less deserving than others and get blamed for their poor health or economic status.

Nationally, Americans are dying sooner than citizens of 42 other countries because the social fabric has been shredded and people are succumbing to diseases brought on by chronic stress, anxiety, and other risk factors, including institutional neglect.

“Other countries with strong social compacts do much better in health,” Iton said.

Iton grew up in Montreal where everybody has health insurance, childcare and college are subsidized, dental care to age 10 is free. There are lots of community resources like libraries, parks, and amateur sports. In short, Canadians have better social benefits and social services to take care of themselves than Americans do. On average they live three years longer.

Iton is upbeat about people building healthier communities. He says people power can make a difference when coupled with the right intervention strategies to create change. Iton’s outfit is spending about $1 billion in the next decade to make California a healthier place to live. They started by changing peoples’ attitudes about poverty.

For example, in France people explain poverty as bad luck. In the U.S. people explain poverty by saying people are lazy and they bring it upon themselves.

“Those two narratives inform different policy approaches,” Iton said. “If people are lazy you limit government because you don’t want them dependent. But if you think people are unfortunate then you develop a social compact to try and anticipate when people will have inevitable misfortune and have the ability to pull themselves back up,” he said.









The numbers show the American approach doesn’t work well. For the second year in a row, more people in the U.S. died younger. Race matters but wealth inequality has a lot to do with it.

Iton said every additional $12,500 of household income buys you one year of life expectancy. He said countries with the greatest income inequality have the lowest life expectancy. Iton says this is creating chronic stress in a growing percentage of the population. And it’s making people sick.

Although the U.S. spends $10,035 per person on health care, about 2-3 times more money per capita than other developed countries, Americans are in poorer health than many countries that spend less. In 2015, total health care costs in the U.S. were $3.2 trillion or 17.8% of Gross Domestic Product (GDP). The rest of the developed world spend between six and ten percent of their GDP on healthcare (see graph).


While the U.S. spends the most on healthcare, the U.S. lags behind other countries in social spending.  Developed countries spend $2 on social services for every $1 they spend on healthcare and they get better health outcomes. The U.S. spends 55 cents for every $1 spent on healthcare and we have worse health outcomes. The American social compact is on a par with Estonia in terms of GDP.

A 2013 study by the National Research Council found even advantaged Americans-those who are white, insured, college-educated, or upper income—are in worse health than similar individuals in other countries. The trend began in the 1980s.

“In places like Nashville, you are on the front lines of this and it’s an important story to tell in this community. People need to understand that we’re all in this together and we’re all being impacted,” Iton said.

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