Powell isn’t wrong — U.S. health spending is almost off the charts

on Feb26
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Jerome Powell, chairman of the U.S. Federal Reserve

Federal Reserve Chairman Jerome Powell on Tuesday exhibited the restraint that he’s known for in being wary to lecture Senate lawmakers about matters outside of his purview.

But the one area where Powell just couldn’t resist was on health care.

Powell said the thing that drives fiscal unsustainability is the cost of health-care delivery. He said the U.S. spends about 17% on health care versus about 10% for other developed countries, while getting “pretty average” outcomes for it.

That’s a trillion dollars or so per year the U.S. is spending for medical needs that it could be spending on other items, he said.

“It’s not that the benefits themselves are too generous, it’s that we deliver them in highly inefficient ways,” Powell said.

Data from the Organization of Economic Cooperation and Development shows Powell’s assessment is right — the U.S. spends far more on health than its developed nation rivals.

Also see: Live blog and video of Powell testimony before Senate panel



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