Practice Management News

Is U.S. Healthcare Really a Big Spender in Global Contrast?

By Jacqueline DiChiara

- Healthcare spending nationwide is more expensive in comparison with our international neighbors due to greater medical technology implementation and higher healthcare prices, confirms a Commonwealth Fund issue brief. But is the U.S. really that much of a big spender?

United States healthcare spending Commonwealth Fund

When compared along a globalized scale among 12 other high-income countries – Australia, Canada, Denmark, France, Germany, Japan, Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom – the U.S. healthcare system spends more on healthcare but has less advantageous outcomes, says the Commonwealth Fund.

“Americans have relatively few hospital admissions and physician visits, but are greater users of expensive technologies like magnetic resonance imaging (MRI) machines,” states the Commonwealth Fund.

“Available cross-national pricing data suggest that prices for health care are notably higher in the U.S., potentially explaining a large part of the higher health spending. In contrast, the U.S. devotes a relatively small share of its economy to social services, such as housing assistance, employment programs, disability benefits, and food security,” says the Commonwealth Fund. 

According to a variety of measured factors – health care spending, supply, utilization, prices, and health outcomes – via cross national analysis efforts that precede Affordable Care Act (ACA) implementation, the U.S. “spent far more” on healthcare than 10 of the other 12 countries.

This is despite the fact that the U.S. is the only country lacking a publically financed universal health system, the Commonwealth Fund maintains. Overall spending has slowed both nationally and internationally in recent years.

“[The] U.S. sees poorer results on several key health outcome measures such as life expectancy and the prevalence of chronic conditions. Mortality rates from cancer are low and have fallen more quickly in the U.S. than in other countries, but the reverse is true for mortality from ischemic heart disease,” the Commonwealth Fund adds.

Selected highlights from the Commonwealth Fund issue brief

  • [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)[.]
  • The real growth rate per capita in the U.S. declined from 2.47 percent between 2003 and 2009 to 1.50 percent between 2009 and 2013. In Denmark and the United Kingdom, the growth rate actually became negative.
  • 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[.]
  • 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.
  • 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 contrast, the average Canadian had 7.7 physician visits and the average Japanese resident had 12.9 visits in 2012.
  • 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.
  •  [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. 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.

Is such data completely irrelevant due to a rigged numbers game?

Such results about how the U.S. rather detrimentally stacks up to its international counterparts may be dangerously misleading. There are many factors that perhaps make such data irrelevant: namely, population. Is a comparison of apples to watermelons a dangerously overlooked issue?

According to the U.S. Census Bureau, the population of the U.S. tops 322 million. Norway’s population, for instance, is just over 5 million.

Similarly, there are over 914,000 total staffed beds in all U.S. registered hospitals, according to the American Hospital Association. This number represents nearly 1/5 of the entire population of Denmark alone. Whether or not such reported facts hold any weight is perhaps a matter of opinion merely worth noting.

Can closer examination of similarites among large and small provide answers?

Just as opposites sometimes attract, despite severe population differences, many countries do share various pieces of data. Last year’s Commonwealth Fund research, which compared performance measures such as quality of care, efficiency, and “healthy lives,” showed some similarities between countries that are nonetheless different in size.

Regarding one example, the U.S. and the United Kingdom (population 64 million) had much higher death rates in 2007 than other countries. 

Questions remain that perhaps require further exploring: Why are death rates among both countries that differ in size higher and how can such not become a repeat statistic? What do both countries have in common when it comes to matters of healthcare? Can better defining this answer help advance the global healthcare industry across nations both large and small?

Does the U.S. still have a great deal to learn from our neighbors?

Perhaps providing an element of clarity to such questions and numerical trepidations, the Commonwealth Fund in 2014 stated the U.S. is falling behind its counterparts. The U.S. has a lot to learn from our neighbors, says the Commonwealth Fund, and can make significant strides by doing so:

Disparities in access to services signal the need to expand insurance to cover the uninsured and to ensure that all Americans have an accessible medical home. Under the Affordable Care Act, low- to moderate-income families are now eligible for financial assistance in obtaining coverage.

Meanwhile, the U.S. has significantly accelerated the adoption of health information technology following the enactment of the American Recovery and Reinvestment Act, and is beginning to close the gap with other countries that have led on adoption of health information technology.

Significant incentives now encourage U.S. providers to utilize integrated medical records and information systems that are accessible to providers and patients. Those efforts will likely help clinicians deliver more effective and efficient care.

Many U.S. hospitals and health systems are dedicated to improving the process of care to achieve better safety and quality, but the U.S. can also learn from innovations in other countries — including public reporting of quality data, payment systems that reward high-quality care, and a team approach to management of chronic conditions.

Based on these patient and physician reports, and with the enactment of health reform, the United States should be able to make significant strides in improving the delivery, coordination, and equity of the health care system in coming years.

What are your thoughts? Reach out to the author at jdichiara@xtelligentmedia.com.