Unexpectedly Intriguing!
July 13, 2009

Total Health Care Expenditures per Capita, by State of Residence, 2004 We've been playing with a new web-based data visualization tool from IBM this morning called Many Eyes, which is just too cool! How cool is it? Well, with a minimum of effort, we've whipped up a couple of charts based on the data we have for the relationship between total health care expenditures per capita and GDP per capita for each state in the U.S.!

The first chart we created this morning simply presents the total health expenditures per capita by state of residence for 2004 (Many Eyes also makes an interactive version of this map available).

We next crunched some numbers to determine how each state's total health expenditures per capita would fall with respect to the value we would predict based upon each's GDP per capita. The following chart presents our results as a percentage of the value we would expect given the actual GDP per capita of each using the refined relationship we presented last week (interactive version available here).

Total Health Care Expenditures per Capita, by State of Residence, as a Percentage of the Expected Value Given Each State's GDP per Capita, 2004 What we find is that three states are significantly skewed from what our relationship would predict. West Virginia has the most inflated health expenditures per capita at 198.9% of what we would predict based on the state's economic output per person. Mississippi ranked second at 182.2%, while Maine came in third at 160.3%.

That these three states also represent some of the poorest in the United States helps explain why. It's very likely that health expenditures in these states are boosted by a significant contribution by the U.S. federal government, well beyond the level that would be supported by each's economic output, for the purpose of "equalizing" them with other U.S. states. We can confirm this as the chart presenting the total health expenditures per capita (see above right) shows that each state's total health spending per capita is largely in line with many of their neighboring states.

It's likely a similar mechanism is at play for the next six states that fall well above what we would predict their level of health expenditures per capita would be based upon their GDP per capita. These states include Alabama, Arkansas, Kentucky, Montana, South Carolina and Vermont, which all range between 130 and 150% higher that the level we would anticipate. The District of Columbia would also fall in this range at 141.5% of the level of health expenditures per capita that we would anticipate, even given its outsize GDP.

The remaining 41 states would then all be within 30% of the level of total health expenditures per capita that we would predict based on the GDP per capita of each.

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