October 16, 2019

The Price of Social Programs

By Kate Raphael

In other blog posts, we’ve discussed U.S. health care spending and outcomes. In short, we spend a lot more on medical care than other high-income countries, yet our health outcomes are often worse. We also spend a lot of money on social programs, which have been shown to be associated with improved health outcomes. It makes intuitive sense that if we decrease our spending on social programs, we will pay more for medical care, in downstream effects that aren’t ameliorated by upstream interventions (like housing vouchers or nutritional assistance). It turns out, this may not be the case.

In his latest Health Care Triage video, Dr. Aaron Carroll takes a look at a recent paper that examined this spending relationship. The authors—Irene Papanicolas, Liana Woskie, Duncan Orlander, E John Orav, and Ashish Jha (co-chair of the Drivers of Health advisory committee)—examined 35 OECD countries and asked: How much does the U.S. spend on social programs compared to other OECD countries? Is social spending inversely related to health care spending?

The authors found that although U.S. health care spending is high compared to other OECD countries, U.S. social spending was about on par with social spending in other countries. Even more surprising, decreased social spending was not associated with higher spending on health care. The researchers found a positive correlation between social and medical spending; countries that spend more on medical care are also more likely to spend more on social programs. These two types of spending may not be substitutes for each other, so even if more social spending doesn’t save us money on health care in the long run, it still has other positive health outcomes. As Aaron Carroll says, “sometimes good things cost money.”

Watch the whole video here: