That “1/6 of gdp” is the US, not necessarily elsewhere. US healthcare is realistically unaffordable for most people. The PRICE of US healthcare is about 2-3 times more than its VALUE.
The proof is very straightforward: Life expectancies in major OECD countries with universal healthcare are 2-3 years LONGER than US life expectancies at comparable ages. Thus, paying MORE and getting LESS is the definition of a failed system.
However, even 1/10th of GDP is not insignificant.
DB2
For me, the allocation is zero outside the first world. Those emerging markets with favorable demographics need lots of things in order to be competitive economically. In addition to the issues you listed, they also need strong education systems.
We are talking about 8% or 1/12th of GDP for healthcare. That provides top-class healthcare to everyone. Note the continuing failure of the alleged US “free market economy”.
Still not insignificant, and (whatever the percentage) it is the elderly who drive health care spending. This helps counteract the previously mentioned effects of the lower spending rates by the older cohort on the economy.
DB2
That’s no doubt true, but consumer spending still drops dramatically with age.