It is well known that the US spends more on health care than
other comparably developed countries. In
2010, the US spent an average of $8,233 per patient for the year. This accounts for 17.6% of GDP, which means
that for every $1 the US spends, $0.17 is spent on health care. Among comparably developed nations, the
average is 9.5% GDP. The next highest
spender is Norway, which spends $5,388 per patient. The average among comparably developed
countries is $3,269.
So why do we spend so much more in the US? There are several reasons.
The first is that we have fewer practicing physicians, 2.4
per 1000 people, compared to an average of 3.1.
We also have fewer hospital beds, 2.6 per 1000 people, compared to
3.4. So we actually see doctors less on
average than our counterparts in places like the Netherlands and France.
The primary care establishment is underdeveloped in the
US. We spend about 2.5X more on
ambulatory care. Having too few PCP’s
means that people often go to hospitals to manage chronic conditions like
diabetes and asthma. However, hospital
stays in the US are almost half as short as the average, meaning that the issue
may not be adequately resolved prior to discharge.
France is often used as a model of health care delivery when
discussing the shortcomings of the US system.
There are several key differences between the US healthcare model and
the French healthcare model. In France,
hospitals, doctors and other providers are paid similar fees for most of their
patients, regardless of where care is rendered.
In the US, payment is determined by which insurance the patient has. In France, a surveillance organization tracks
medical spending for all services and can lower the fee for any service that is
growing faster than expected.
In many European countries, prices are set by the government
or by providers and insurers together. In
the US, service fees are largely inflexible.
Medicare and Medicaid fees are negotiated by the government and prices
are much lower than for the privately or uninsured.
Administrative cost per patient is much higher in the US
than in other countries. This is due in
large part to the lack of electronic records in many establishments. If doctors cannot determine exactly how a
patient was diagnosed, they are more likely to repeat tests that have already
been run. Lack of centralized records
can also encourage “doctor shopping,” in which a patient receives duplicated
care in order to yield a desired result.
Some procedures are also much more common in the US than in
other countries. We perform 97.7 MRI
exams per 1000 patients, compared with the average of 46.3 per 1000
patients. We also perform more CT exams,
tonsillectomies, coronary bypasses and knee replacements. In addition to performing them more, they are
also more expensive, by about 20% for knee surgery and 50% for a normal vaginal
birth. Hospital spending in the US is
over 60% higher than the average in comparably developed countries.
Pharmaceutical and medical goods cost higher than in other
countries, although they account for a smaller portion of spending in the US. 50
top selling meds were priced an average of 60% higher in US. The US has the highest drug utilization rate,
with 61% of adults taking at least one prescription medication and 25% taking
at least four.
There are parts of the US health care system that work
well. In particular, cancer care
performs well. Five year survival rates
for many cancers are the best in the US.
Access to newer medications and treatments is more readily available in
the US due in large part to its close relationship with researchers.
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