Everyone knows that in the U.S. we spend far more on healthcare than in every other country in the world. I recently read a PBS interview looking at this issue primarily looking not at the gross spending but to look at what we spend our money on compared to other developed countries, how much we spend on various aspects of care, and to see if I had any new thoughts on ways the U.S. could improve.
First to remember the major stats, these are from the Organization for Economic Co-Operation and Development (OECD): that compare 34 member countries. The U.S. in 2010 spent 17.6% of its GDP on healthecare, vs. the second place OEDC conuntry spending 12.0% and OECD average of 9.5%. That is $7910./ per person annually, vs. the second place country spending $5270. and an average of $4098.
Here is a table outlining where the U.S. healthcare dollar is spent and how it compares to the OEDC average.
|U.S. Spending||Percent of OECD Average|
|Administration and Public Health||$856.||296%|
|Pharmaceuticals and Other Medical Goods||$1105.||155%|
Here are some other notable data elements:
Use of advanced imaging: The U.S. does 97.7 MRIs and 265 CT scans / 1000 population annually, and the OECD average is 97.7 and 124 respectively.
Some procedures in the U.S cost a lot more. Coronary bypass surgery: U.S. = $34,358. vs. second place France = $23,126 and Germany $14067. Coronary angioplasty: U.S. = $14378 vs second place Canada = $9277 and Germany $3347. Normal delivery = 4451 vs second place Austraia $2984 and Finland $1521.
Some facts lend to confusion in thinking about why costs are higher in the U.S. We tend to think that shortening hospital stays keeps costs down. Yet the average U.S. hospital stay is the 29th longest of the 34 OECD countries at 4.9 days vs. the OECD average of 7.1 days. The U.S. has considerably fewer physicians and hospital beds than most of the other countries, ranking 26th in number of physicians and 28th in the number of hospital beds per capita.
The article points out three key things that differentiate the U.S. from the other countries in the organization. First countries that seem to control their expenses better like Japan and France have a common fee schedule so that physicians and hospitals are paid the same amount for any patient they see for a given service. (think Medicaid vs. Blue Cross/Blue Shield) Next these countries are flexible in what they pay for services. If they see a given service being used more, they may reduce reimbursement. In the U.S. rates are much less flexible. Medicare rates for example need congressional approval to be altered. Thirdly, in U.S. private insurance there are few means and really little incentive to control costs.
The report does point out a few areas where the U.S. health care system excels. First is in cancer care where survival rates for colorectal and breast cancer are better than in other countries. In addition wait times for care If you have insurance are much better than in most countries. On the contrary the U.S. is doing relatively poorly in several areas of public health. Obesity, alcohol use are examples of public health risks where the U.S. is doing poorly.
So what do I think the U.S. could do to help control costs? One way I think is politically unacceptable at this point would be to have a public insurance option available to all Americans. This could be a single public system analogous to the Canadian or English system, or a government sanctioned insurance option for individuals and employers. Other than this change which I see little chance of happening in the short term but anticipate as being inevitable in the long term there are other things we could do. First we could find a way to have a higher percentage of primary care physicians and lower percentage of specialists. Practically I suspect that would be to produce more physicians overall with a means of inducing these additional physicians to go into primary care. Second we could use governmental policy to promote healthier lifestyles. Policies to increase the cost of cheap alcohol, promote healthier eating and walking instead of driving, and finding policy to reduce rates of STDs like and preterm births could have some positive effect on health care costs. Also promotion of end-of-life planning could make a difference. Get creative. Give a $5./ year tax credit to everyone on Medicare who has an advance directive and durable power of attorney for healthcare. Significant change in how much we pay for procedural care could help. Tort reform might reduce the not-insignificant costs of defensive medicine.
What ideas do readers have for bringing down the costs of health care in the U.S? Leave a comment.