Fed Chair Jerome Powell calls out massive US health spending, says Americans are 'getting nothing' in return
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Federal Reserve Chair Jerome Powell said at a Senate hearing on Wednesday that Americans were "getting nothing" in return for what the US spends on healthcare.
"The outcomes are perfectly average for a first-world nation, but we spend 6% to 7% of GDP more than other countries," he said. "So it's about the delivery. That's a lot of money that you are effectively spending and getting nothing."
Studies have indicated that the US spends far more on healthcare than other developed countries, only to achieve worse outcomes.
One study published last year in a medical journal estimated that nearly a quarter of the US's $3.6 trillion health spending was wasteful.
The United States is one of the highest spenders on healthcare for its citizens, but it has very little to show for it, Federal Reserve Chairman Jerome Powell said on Wednesday.
Powell made the brutal comments during a Senate Banking Committee hearing on monetary policy.
Republican Sen. Ben Sasse of Nebraska asked the Fed chair to weigh in on the effect of healthcare spending on the economy, and Powell said the US was spending at far higher levels without much to show for it.
"The outcomes are perfectly average for a first-world nation, but we spend 6% to 7% of GDP more than other countries," he said. "So it's about the delivery. That's a lot of money that you are effectively spending and getting nothing."
The Fed chair added that developed countries had been more successful in delivering quality healthcare for much less to their citizens.
"It's not that these benefits are fabulously generous — they're just what people get in Western economies," Powell said.
It's not the first time Powell has weighed in on the rising price tag of healthcare in America. In a 2018 interview with Yahoo Finance, he warned that it could hurt the country's economy in the future.
"It's no secret: It's been true for a long time that with our uniquely expensive healthcare delivery system and the aging of our population, we've been on an unsustainable fiscal path for a long time," the Fed chair said.
US health spending grew by 4.6% in 2018, reaching over $3.6 trillion, according to the Centers for Medicare and Medicaid Services. And it has been swelling for decades.
The US spent about $10,000 per person for healthcare in 2017, about twice as much as other developed countries, according to the nonpartisan Kaiser Family Foundation. But it has ranked poorly in health outcomes, particularly on infant mortality and deaths from preventable causes under age 75.
One study published in the Journal of the American Medical Association last year estimated that nearly a quarter of that spending — up to $935 billion a year— was wasteful, with failures of care delivery and coordination eating up most of the nation's mismanaged health expenditures.
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