According to a new report from the normally reliable McKinsey Global Institute of McKinsey and Company, the United States has ?an intrinsically more expensive [health care] system? than other OECD countries.

Even after adjusting for higher per-capita income levels, the United States spends some $477 billion ? $1,645 per capita ? more on health care than peer countries [do].

But the report has stacked the deck in what it considers to be costs. For example, depreciation and amortization count as costs in the United States but not other countries, presumably because government-purchased equipment is never obsolete and never wears down.

The United States has higher costs for medical devices, but also has a higher utilization rate. This may be a result of third-party payers hiding the cost and creating excess demand, but as John Goodman noted, it may also have some significant positives.

There?s a lot more in the study, but I?ll conclude with its treatment of the significant advantage the US has in drugs ? an advantage MGI considers a cost. Americans use 20 percent fewer prescription or over-the-counter drugs, but pay prices that are 70 percent higher. Other countries have a single purchaser who negotiates higher prices, and you know the drill. Americans have access to next-generation pharmaceuticals as much as two years before the rest of the world. Some of these drugs ?quickly become top sellers.? After a couple years, the UK and Germany catch up in relative volume, but more Americans benefit sooner from each new drug.

American health care does have significant issues with cost and health care financing needs reform, but MGI has done harm to the debate on US health care with this report that ignores costs borne by governments, benefits that accrue from using medical care, and the difference between accounting expenses and economic costs. That harm is being exacerbated by Paul Krugman and others who are using the report as an argument for a single-payer system.

We need more individual control, not less.