Americans Spend More on Healthcare Than Comparable Nations

The United States spends far more on healthcare than other countries, although Americans visit the doctor and are hospitalized less often than most of the other 34 member countries of the Organization for Economic Co-operation and Development OECD).  In its Health at a Glance 2011 report, the OECD shows that the United States spent about $7,960 per person on healthcare in 2009 – approximately 2.5 times the average of the countries studied.  It also determined that health spending in the U.S. has grown faster than in all other high-income OECD countries since 1970, even accounting for population growth.

“Why?” asks Julie Appleby in Kaiser Health News.  “Generally, prices for medical care are higher in the U.S. – and some services are performed more often.  Hospital prices are 60 percent higher than the average of 12 selected OECD countries, and the U.S. also generally pays more for each appendectomy, birth, joint replacement or cardiac procedure.  Americans have more imaging tests, such as CT scans and MRIs, than residents of other countries and are far more likely to have knee replacements, coronary angioplasty or surgery to remove their tonsils.  Even with all that, compared with most of the other developed countries, the U.S. has fewer practicing physicians per person, fewer hospital beds, and patients don’t stay as long in the hospital.  Administrative costs in the U.S. are also high, the report notes, accounting for about seven percent of total spending.  That is roughly comparable to what is spent in France and Germany, which have universal health coverage.  In Canada — another country with national healthcare – administrative costs are about four percent of health spending.”

“The U.S. is just this astonishing outlier compared to everyone else,” said Mark Pearson, the head of the OECD’s social policy division. A significant part of the difference relates to pricing.  American patients don’t spend more time in the hospital or visit more doctors than patients in other OECD countries; they pay more for everything.  Physician fees are more than twice the average cost, for example, while drugs and hospital care cost 60 percent more.  In terms of results, however, the U.S. does not come out on top.  Life expectancy in 2009 was 78.2 years, below the OECD average of 79.5.  That puts the nation closer to the Czech Republic and Chile, “not countries you would usually expect the U.S. to be compared to,” Pearson said.

The U.S. also has one of the poorest records in terms of premature mortality in general and mortality from heart disease in particular.  Americans have the highest obesity rate — with more than one-third of the population considered obese.  They also have one of the highest rates of hospital admission for illnesses that are optimally managed by primary-care physicians, including asthma, chronic obstructive pulmonary disease (including emphysema), and diabetes.

The news isn’t all bad.  The OECD report notes that the U.S. does an excellent job of cancer care, with very high survival rates and low mortality rates.  Stroke deaths are well below average in the United States.

Americans spend approximately 17.4 percent of its gross domestic product on healthcare; other OECD nations spend an average of 9.6 percent of their GDPs on healthcare.  According to OECD, the U.S. has an “underdeveloped” primary-care system that physician shortages only intensify.  There are 2.4 physicians for every 1,000 Americans, compared with an average of 3.1 in other countries.  Additionally, there are 3.1 hospital beds per 1,000 Americans, compared with 4.9 per 1,000 in other countries.

The Washington Post’s Ezra Klein thinks that Americans spend too much on healthcare. According to Klein, “There are a lot of complicated explanations for why American healthcare costs so much, but there are also some simple ones.  Chief among them is ‘we pay too much.’  And I don’t mean in general.  I mean specifically.  Mountains of research show that for every piece of care you might name — a drug, a doctor visit, a diagnostic — you’ll pay far more in the United States than in other countries.  That’s why seniors head to Canada to buy drugs made in the United States.  In Canada, the government negotiates one low price.  In America, insurers with much less bargaining power negotiate many higher prices.”

According to Ezekiel Emanuel, a bioethicist and fellow at the nonprofit bioethics research institute The Hastings Center, “Unfortunately, few people really understand how much we spend on healthcare, how much we need to spend to provide quality care, and the difference between the two.  Do we spend too much?  Let’s begin with the costs.  In 2010, the United States spent $2.6 trillion on healthcare, over $8,000 per American. This is such an enormous amount of money, it’s difficult to grasp.

“Consider this: France has the fifth largest economy in the world, with a gross domestic product of nearly $2.6 trillion.  The United States spends on healthcare alone what the 65 million people of France spend on everything: education, defense, the environment, scientific research, vacations, food, housing, cars, clothes and healthcare.  In other words, our health care spending is the fifth largest economy in the world.

“The fact is that when it comes to healthcare, the United States is on another planet.  The United States spends around 50 percent more per person than the next highest-spending countries, Switzerland and Norway.”

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