Healthcare costs in the U.S. have grown exponentially in the past few years. According to the OECD (2014) U.S. spend 16.9% of its GDP on healthcare in 2012, the highest among OECD countries and 7.5% above the OECD average of 9.3%. In 2014, the national health care expenditure grew by another 5.3% to $3.0 trillion in 2014, and 17.5% of the GDP (CMS, 2014).The increasing costs of healthcare in the U.S. is a worrying trend, and there is a possibility that healthcare will be very expensive for the average citizen in the near future. Some of the reasons for the rising healthcare costs in the US include: a big aging population, technology, administrative costs, and uninsured citizens. Despite the high costs of healthcare, the quality of U.S. health is still below average as compared to other developed OECD nations (Mills, 2016). The U.S. government needs to develop a system of enhancing transparency in healthcare so that the consumer can get good quality healthcare to rhyme with the high cost of care.
According to the OECD (2014) while the total healthcare costs have been on the rise for years, the rate of growth has significantly reduced. Since 2009, the U.S. health care spending slowed down, the rate of growth slowed down from 2.47% between 2003 and 2009 to 1.50% between 2009- 2013 (Squires & Anderson, 2015). After the 2008 financial crisis, it is worth noting that the health care spending growth rate in some developed nations such as Denmark and the UK became negative. Regardless, the total expenditure is still above the OECD rate. In 2012, 48% of health spending was publicly financed, and yet most OECD countries strive to finance an average of 72% (Davis et al., 2014). The most notable difference between the U.S. and other industrialized nations is the lack of a universal health coverage. At least 5 OECD nations have universal health systems that ensure that all patients can access quality health care. The Affordable Care Act is a move made by the U.S. towards providing healthcare to the uninsured, but its implementation is underway.
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A Commonwealth Fund study carried in 2014 showed that the U.S. health care system consistently underperforms in comparison to other developed countries (Davis et al., 2014). The study compared the U.S. health system with the health care systems of the other 10 countries- Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom as part of the Commonwealth Fund Mirror, Mirror Edition (Davis et al., 2014). The study compared the recent results from other editions, and it was discovered that the U.S. has failed to achieve better health outcomes than other nations. The U.S. came last or almost last on the dimensions of health care access, efficiency and equity. On the other hand, the study ranked the United Kingdom health care system as the best, followed by Switzerland (Davis et al., 2014).
Most developed nations spend between 9-11% of its GDP on health care, for instance, in 2013 France spend 11.6% of its GDP, while Sweden spends 11.5% (Squires & Anderson, 2015). In comparison to the nations such as the U.K and Australia that spent 8.8% and 9.4% respectively of their GDP on health care in 2013, the U.S is spending twice as much as these nations and yet it has not translated into better health outcomes. The U.S spent 17.1% of its GDP on health care in 2013 (OECD, 2014). The average cost of health care per every U.S. resident was at $1,074 in 2013, which is a relatively low number compared to the $1,630 spent by Swiss residents. France and the Netherlands had a very low average of $277 and $270 respectively. The U.S. lacks a universal health care system, and yet its public healthcare spending amounted to $4,197 per capita in 2013, more than most OECD countries apart from Norway and the Netherlands. In 2013, about 34% of U.S. residents were covered by public health programs only, and yet the U.K spend $2,802 per capita and it covered all its residents (Squires & Anderson, 2015).
Alternatively, the U.S. had fewer practicing physicians in 2013 lower than the OECD median of 3.2 physicians per 1,000 population. Americans also had fewer physician visits than the OECD median of 6.5 visits per year, instead Americans visited the physicians approximately four times. An Average Japanese resident visited the physician at least 12.9 visits in 2012 while an average Canadian visited the physician 7.7 times in a year (Squires & Anderson, 2015). The U.S. also consistently had fewer hospital beds and discharges per capita than in the OECD median (Anderson & Squires, 2010).
According to the International Federation of Health Plans statistics, hospital and physician prices remained high in 2013 in the U.S (Squires & Anderson, 2015). The average price of a bypass surgery in America was at $75,345, the second country with the highest cost of bypass surgery was Australia with $42,130. There is a pattern of higher physician prices for most conditions, and yet the cost of pharmaceuticals are still high. Americans were the top of consumers of prescription medication in 2013 alongside New Zealand residents with more 2.2 prescription drugs per adult (Squires & Anderson, 2015).
Despite its high healthcare expenditure, the U.S. has a relatively poor health in comparison to other OECD countries. The U.S. had the lowest life expectancy among the OECD countries studied in 2013 with a life expectancy of 78.8 years (Squires & Anderson, 2015). The OECD life expectancy median is at 81.2 years, and Japan topped the list with a life expectancy of 83.4 in 2013. Unfortunately, the U.S. also has a higher infant mortality rate among the OECD countries reviewed in 2013 with a rate of 6.1 deaths per 1,000 live births in 2011 (Anderson & Squires, 2015). Chronic diseases are also high in the U.S., with 68% of the 65 and above age bracket suffering from at least two chronic conditions in comparison with countries such as the UK and Canada with 33% and 56% respectively. It is worth noting that the U.S. does exceptionally well regarding cancer care, and the mortality rate from cancer has declined dramatically in comparison to other OECD countries.
The poor quality of health in the U.S. is attributed to the following factors: large number of uninsured, lifestyle and high rates of accidents and violence. The social-economic disadvantages are not to be blamed for poor health outcomes in the U.S., because even well-off non-smoking and non-obese Americans appear to be in worse health when compared to their counterparts abroad (Squires & Anderson, 2015). A study done in 2013 found out that the U.S. spent less on social programs such as retirement, supportive housing and disability programs, and yet they programs play an important role in improving the state of public health, especially among the older generation (Squires & Anderson, 2015).
However, the U.S. has done quite very well in one sector of healthcare, the technology aspect. America is the top consumer of cutting edge medical technology. The U.S. had the highest per capita rates of MRI, computed tomography and positron emission tomography (PET) exams in comparison to other OECD nations (Squires & Anderson, 2015). The rate of technology usage in healthcare is quite high in the U.S. and in Japan, and they both have the highest number of imaging machines.
Technology has played an important in America’s healthcare system, however, the overreliance on expensive medical technology instead of preventative care is still a problem on its own. According to Squires (2012) the OECD tracks the supply and utilization of various diagnostic imaging devices. For instance, in 2009, the approximate number of population per a single MRI was at 25.9 million. The utilization of imaging was quite high in the U.S. with 91.2 MRI exams per 1,000 and 227.9 CT exams per 1,000 (Squires, 2012). The imaging technology is associated with improved outcomes as they make it easy to diagnose conditions and come up with the appropriate course of treatment. However, purchasing and maintaining imaging technologies is quite expensive, and this cost is often transferred to the patient. For instance, the average diagnostic imaging fee for an MRI was at $1,080 in 2011 and $510 for a CT exam (Squires, 2012). The availability of top notch medical technology as well as higher prices for the technology is driving the U.S. health expenditure higher.
Without a doubt, the U.S. health care spending exceeds that of any other country. With a 17.1% of GDP in 2013 being dedicated to health care, it is such a shame that the health outcomes are not as good as the spending (Squires & Anderson, 2015). The heavy spending can be explained by the greater utilization of medical technology and the general high costs of physician visits. High spending on health care has adverse effects on the economy and society in general, the U.S. has to check its healthcare spending to avoid the economic effects such as budget deficits. Cross-national analysis of healthcare spending offers insight on how the U.S. can restructure its healthcare spending and healthcare system to improve the state of health in the country.
References
Anderson, G. F., & Squires, D. A. (2010). Measuring the US health care system: a cross-national comparison. Issue Brief (Commonwealth Fund) , 90 , 1-10.
Centers for Medicare and Medicaid Services. (2016). National Health Expenditure Date: NHE Fact Sheet. Retrieved from: https://www.cms.gov/research-statistics-data-and- systems/statistics-trends-and-reports/nationalhealthexpenddata/nhe-fact-sheet.html
Davis, K., Stremikis, K., Squires, D., & Schoen, C. (2014). Mirror, mirror on the wall. How the performance of the US Health care system compares internationally. New York: Commonwealth Fund.
Mills, M. D. (2016). Why is Healthcare so Expensive in the United States? Journal of Applied Clinical Medical Physics , 17 (3).
Squires, D. A. (2012). Explaining high health care spending in the United States: an international comparison of supply, utilization, prices, and quality. Issue brief (Commonwealth Fund) , 10 , 1-14.
Squires, D., & Anderson, C. (2015). US health care from a global perspective: spending, use of services, prices, and health in 13 countries. Issue brief (Commonwealth Fund) , 15 , 1-15.
