Thursday, October 8, 2015

qotd: More on high health spending and poor population health in U.S.

The Commonwealth Fund
October 8, 2015
U.S. Health Care from a Global Perspective: Spending, Use of Services,
Prices, and Health in 13 Countries
By David Squires, Chloe Anderson

This analysis draws upon data from the Organization for Economic
Cooperation and Development and other cross-national analyses to compare
health care spending, supply, utilization, prices, and health outcomes
across 13 high-income countries: Australia, Canada, Denmark, France,
Germany, Japan, Netherlands, New Zealand, Norway, Sweden, Switzerland,
the United Kingdom, and the United States.

Key Findings:

* The United States is the highest spender on health care.

Data from the OECD show that the U.S. spent 17.1 percent of its gross
domestic product (GDP) on health care in 2013. This was almost 50
percent more than the next-highest spender (France, 11.6% of GDP) and
almost double what was spent in the U.K. (8.8%). U.S. spending per
person was equivalent to $9,086 (not adjusted for inflation).

* Private spending on health care is highest in the U.S.

In 2013, the average U.S. resident spent $1,074 out-of-pocket on
health care, for things like copayments for doctor's office visits and
prescription drugs and health insurance deductibles. Only the Swiss
spent more at $1,630, while France and the Netherlands spent less than
one-fourth as much ($277 and $270, respectively). As for other private
health spending, including on private insurance premiums, U.S. spending
towered over that of the other countries at $3,442 per capita—more than
five times what was spent in Canada ($654), the second-highest spending

* U.S. public spending on health care is high, despite covering fewer

Public spending on health care amounted to $4,197 per capita in the U.S.
in 2013, more than in any other country except Norway ($4,981) and the
Netherlands ($4,495), despite the fact that the U.S. was the only
country studied that did not have a universal health care system. In the
U.S., about 34 percent of residents were covered by public programs in
2013, including Medicare and Medicaid.7 By comparison, every resident in
the United Kingdom is covered by the public system and spending was
$2,802 per capita. Public spending on health care would be even greater
in the U.S. if the tax exclusion for employer-sponsored health insurance
(amounting to about $250 billion each year) was counted as a public

* Despite spending more on health care, Americans have fewer hospital
and physician visits.

The U.S. had fewer practicing physicians in 2013 than in the median OECD
country (2.6 versus 3.2 physicians per 1,000 population). With only four
per year, Americans also had fewer physician visits than the OECD median
(6.5 visits). In the U.S., there were also fewer hospital beds and fewer
discharges per capita than in the median OECD country.

* Americans appear to be greater consumers of medical technology,
including diagnostic imaging and pharmaceuticals.

The U.S. stood out as a top consumer of sophisticated diagnostic imaging
technology. Americans had the highest per capita rates of MRI, computed
tomography (CT), and positron emission tomography (PET) exams among the
countries where data were available. In addition, Americans were top
consumers of prescription drugs.

* Health care prices are higher in the U.S. compared with other countries.

Data published by the International Federation of Health Plans suggest
that hospital and physician prices for procedures were highest in the
U.S. in 2013. Other studies have observed high U.S. prices for

* The U.S. invests the smallest share of its economy on social services.

A 2013 study by Bradley and Taylor found that the U.S. spent the least
on social services—such as retirement and disability benefits,
employment programs, and supportive housing—among the countries studied
in this report, at just 9 percent of GDP.12 Canada, Australia and New
Zealand had similarly low rates of spending, while France, Sweden,
Switzerland, and Germany devoted roughly twice as large a share of their
economy to social services as did the U.S.

The U.S. was also the only country studied where health care spending
accounted for a greater share of GDP than social services spending. In
aggregate, U.S. health and social services spending rank near the middle
of the pack.

* Despite its high spending on health care, the U.S. has poor
population health.

On several measures of population health, Americans had worse outcomes
than their international peers. The U.S. had the lowest life expectancy
at birth of the countries studied, at 78.8 years in 2013, compared with
the OECD median of 81.2 years. Additionally, the U.S. had the highest
infant mortality rate among the countries studied, at 6.1 deaths per
1,000 live births in 2011; the rate in the OECD median country was 3.5
deaths. The prevalence of chronic diseases also appeared to be higher in
the U.S.

A 2013 report from the Institute of Medicine reviewed the literature
about the health disadvantages of Americans relative to residents of
other high-income countries. It found the U.S. performed poorly on
several important determinants of health. The Institute of Medicine
found that poorer health in the U.S. was not simply the result of
economic, social, or racial and ethnic disadvantages—even well-off,
nonsmoking, nonobese Americans appear in worse health than their
counterparts abroad.

* The U.S. performs well on cancer care but has high rates of mortality
from heart disease and amputations as a result of diabetes

One area where the U.S. appeared to have comparatively good health
outcomes was cancer care. The opposite trend appears for ischemic heart
disease, where the U.S. had among the highest mortality rates in
2013—128 per 100,000 population compared with 95 in the median OECD
country. The U.S. also had high rates of adverse outcomes from diabetes,
with 17.1 lower extremity amputations per 100,000 population in 2011.
Rates in Sweden, Australia and the U.K. were less than one-third as high.

From the Discussion

Health care spending in the U.S. far exceeds that in other countries,
despite a global slowdown in spending growth in recent years. At 17.1
percent of GDP, the U.S. devotes at least 50 percent more of its economy
to health care than do other countries. Even public spending on health
care, on a per capita basis, is higher in the U.S. than in most other
countries with universal public coverage.

How can we explain the higher U.S. spending? In line with previous
studies, the results of this analysis suggest that the excess is likely
driven by greater utilization of medical technology and higher prices,
rather than use of routine services, such as more frequent visits to
physicians and hospitals.

High health care spending has far-reaching consequences in the U.S.
economy, contributing to wage stagnation, personal bankruptcy, and
budget deficits, and creating a competitive disadvantage relative to
other nations. One potential consequence of high health spending is that
it may crowd out other forms of social spending that support health. In
the U.S., health care spending substantially outweighs spending on
social services. This imbalance may contribute to the country's poor
health outcomes. A growing body of evidence suggests that social
services play an important role in shaping health trajectories and
mitigating health disparities.

Exhibit 8. Health and social care spending as a percentage of GDP

(The first number is the percent of GDP spent on health care, the second
is the percent spent on social care, and the third is the percent spent
on both combined)

12 21 33 France
12 21 33 Sweden
11 20 31 Switzerland
11 18 29 Germany
12 15 27 Netherlands
16 09 25 United States
09 16 25 Norway
08 15 23 United Kingdom
09 11 20 New Zealand
10 10 20 Canada
09 11 20 Australia


Comment by Don McCanne

This update, comparing us with 13 high-income countries, confirms that
we still spend far more than any other nation on health care, partly
because of our very high prices, even though we are not using more
health care. Worse, in spite of our high levels of spending, our
population health remains relatively poor.

One exhibit in this report shows that our combined spending on health
care and on social care (retirement and disability benefits, employment
programs, and supportive housing) is about average (see Exhibit 8,
above). Considering that our health care spending is so high, it may be
that the comparatively low spending on social services is a significant
contributor to our poor population health.

We do need to improve the way we spend our health care dollars so that
everyone has affordable access to high quality care, and a single payer
system would do that. However, since we are a very wealthy nation, we
should be able to increase spending on social services as well. The
progressive taxes required to do that would also help to address our
crisis in income inequality.

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