Published: Wed, March 14, 2018
Medical | By Johnnie Horton

Healthcare in U.S. costs nearly twice as much as other rich nations

Healthcare in U.S. costs nearly twice as much as other rich nations

Image credits: Papanicolas et al, 2018 / JAMA. In 2016, the USA spent 17.8% of GDP, compared to 9.6%-12.4% in other countries. The U.S. spending on pharmaceuticals per capita was $1,443 compared to $466-$939 for the others.

Of course, much ink has been spilled over health care in the past decades, and the causes are complex and hard to thoroughly assess.

"It is not possible to conclude that individuals in the United States pay higher prices for these services just by observing that they spend more but have the same number of visits for cancer care, receive different medications, or use the same number of stents without having granular data about the exact type of services and products being used", they write.

Despite this, the country had significantly poorer health outcomes in many areas. Underinvestment in social services didn't appear to explain the difference, either.

Researchers also pointed out many myths regarding why United States health care is so pricey.

Two-thirds of the difference in health care costs between the US and other countries were rolled up into medication costs, expensive tests and procedures and administrative costs.

The American numbers for physician and nursing workforce and number of hospital beds were similar to the other nations.

Doctors' pay was also much more, with the average salary for a general practice physician in the USA at $218,173, compared to other countries where the range was $86,607-$154,126.

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The good news is that despite poor overall outcomes, when people are sick, the quality of delivered healthcare is quite high.

"As patients, physicians, policy makers, and legislators actively debate the future of the United States health system", they write, "data such as these are needed to inform policy decisions".

"As the USA continues to struggle with high healthcare spending, it is critical that we make progress on curtailing these costs". Instead, an effort to reduce prices and administrative costs is needed. Other countries spent much less of their GDP on health care, ranging from 9 percent in Australia to 12 percent in Switzerland - while they had more than 99 percent of the populations with health care coverage. "This gap and the challenges it poses for American consumers, policymakers, and business leaders was a major impetus for healthcare reform in the USA, including delivery reforms implemented as part of the Affordable Care Act", said senior author Ashish Jha, a professor at the Harvard Global Health Institute (HGHI).

"These data suggest that numerous policy efforts in the USA have not been truly evidence-based".

Several studies have already found that counterintuitive measures, such as increasing social spending, can actually reduce expenses in the long term.

Authors found the total spending on generic drugs in the less than 30 percent of the total dollars spent on pharmaceuticals, suggesting that brand name medications are a major driver of costs for the US health care system. Prices of drugs like cholesterol-lowering Crestor or diabetes medication Lantus were more than twice as high in the USA than in other countries. For example, the USA appears to have the best outcomes for those who have heart attacks or strokes, but is below average for avoidable hospitalizations for patients with diabetes and asthma.

The problem is that despite investing heavily in health care, Americans don't have access to the quality they're paying for. What researchers found was not a single sector with high prices, but that every sector had extraordinary price tags. What's needed is a reduction in unnecessary costs and an investment in the areas where the country is still lagging behind.

The also spending much more on pharmaceutical costs.

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