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

U.S. Health Care from a Global Perspective: Spending, Use of Services, Prices, and Health in 13 Countries

By David Squires, Chloe Anderson
The Commonwealth Fund, October 8, 2015

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 country.

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

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 expenditure.

  • 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 pharmaceuticals.

  • 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

http://www.commonwealthfund.org/publications/issue-briefs/2015/oct/us-he...

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Comment:

By Don McCanne, MD

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.