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Why Does the U.S Rank 29th in Longevity?

Yes, the U.S. healthcare system is full of inefficiencies which lead to bloated costs. But no, that’s not the reason that U.S. longevity ranks only 29th in the world.
That’s the gist of a working paper (abstract here; pdf here) by Samuel H. Preston, a health demographer at Penn, and Jessica Y. Ho, a health economist.
As summarized in the NBER Digest:

The authors demonstrate that mortality reductions from prostate and breast cancers have been exceptionally rapid in the United States relative to a set of peer countries. They argue that these unusually rapid declines are attributable to wider screening and more aggressive treatment of these diseases. Screening for other cancers also appears unusually extensive, and five-year survival rates from all of the major cancers are very favorable. Survival rates following heart attack and stroke are also favorable (although one-year survival rates following stroke are only average), and the proportion of people with elevated blood pressure or cholesterol levels who are receiving medication is well above European standards.
These performance indicators pertain primarily to what happens after a disease has developed, though. It is possible that the U.S. health care system performs poorly in preventing disease in the first place. Unfortunately, there are no satisfactory international comparisons of disease incidence. Some researchers report a higher prevalence of cancer and cardiovascular disease in the United States than in Europe, and biomarkers confirm that many disease syndromes are more prevalent in the United States than in England and Wales, for example. Higher disease prevalence is prima facie evidence of higher disease incidence, although those high incidence rates also could be produced by better identification (for example, through screening programs) or better survival. The history of exceptionally heavy smoking and the more recent increase in obesity in the United States suggest that a high disease incidence cannot be laid entirely at the feet of the health care system.
Evidence that the major diseases are effectively diagnosed and treated in the United States does not mean that there may not be great inefficiencies in the U.S. health care system, according to the authors. A list of prominent inefficiency charges levied against the system include: fragmentation, duplication, inaccessibility of records, the practice of defensive medicine, misalignment of physician and patient incentives, limitations of access for a large fraction of the population, and excessively fast adoption of unproven technologies. Some of these inefficiencies have been identified by comparing performance across regions of the United States, but the fact that certain regions do poorly relative to others does not imply that the United States on the whole does poorly relative to other countries. The authors also note that many of the documented inefficiencies of the U.S. health care system simply add to its costs rather than harming patients.
They conclude that the low longevity ranking of the United States is not likely a result of a poorly functioning health care system.

This doesn’t come as much of a surprise to anyone who’s dug a bit into the healthcare data (which is vast vast vast), but I don’t believe the public thinks of the issue this way. Many politicians also probably don’t — and their positions are further compromised by the fact that, politically, it can be very hard to blame bad health outcomes on their voters’ overeating, smoking, and other personal choices.
While we don’t have a dedicated healthcare chapter in SuperFreakonomics, healthcare is probably the single most prominent topic throughout the book. A lot of the stories we tell point to failures that could be easily corrected if the existing incentives were aligned less perversely than they are. There are huge gains to be made, for instance, in decreasing hospital-acquired infections and paying attention to the inefficacy of many types of chemotherapy. Also, it may be that less interaction with the healthcare system in general would be a very good thing.