The Financial Express

US health spending twice than other countries with worse results

| Updated: March 15, 2018 12:27:37

Picture used for representational purpose only. Image derived from: www.hsph.harvard.edu Picture used for representational purpose only. Image derived from: www.hsph.harvard.edu

The US spends about twice what other high-income nations do on health care but has the lowest life expectancy and the highest infant mortality rates, according to a new study.

More doctor visits and hospital stays aren’t the problem. Americans use roughly the same amount of health services as people in other affluent nations, the study found.

Instead, health spending may be higher in the US because prices are steeper for drugs, medical devices, physician and nurse salaries and administrative costs to process medical claims, researchers report in JAMA.

“There’s no doubt that administrative complexity and higher drug prices both matter - as do higher prices for pretty much everything in US healthcare,” said lead study author Irene Papanicolas of the London School of Economics and the Harvard TH Chan School of Public Health in Boston.

“These inefficiencies are likely the product of a number of factors including a reliance on fee-for-service reimbursement, the administrative complexity of the US health care system and the lack of price transparency across the system,” Papanicolas said by email.

For the study, researchers examined international data from 2013 to 2016 comparing the US with 10 other high-income countries naming the UK, Canada, Germany, Australia, Japan, Sweden, France, Denmark, the Netherlands, and Switzerland.

In 2016, the US spent 17.8 per cent of its gross domestic product (GDP) on healthcare. Other countries’ spending ranged from a low of 9.6 per cent of GDP in Australia to a high of 12.4 per cent of GDP in Switzerland.

A large part of this was administrative costs, which accounted for 8 per cent of GDP in the US, more than double the average of 3 per cent of GDP.

At the same time, the US spent an average of $1,443 per person on drugs, compared with an average of $749 per person across all of the countries in the study.

US spending was also higher for imaging and for many of the most common medical procedures like knee replacements, surgical cesarean births, and surgeries to repair or unclog blood vessels.

If the US did less imaging and fewer of 25 common procedures, and lowered prices and the number of procedures to levels in the Netherlands, it would translate into a savings of $137 billion, Dr Ezekiel Emanuel of the Perelman School of Medicine at the University of Pennsylvania writes in an accompanying editorial.

Life expectancy in the US was the lowest, at 78.8 years, the study also found. In the other countries, life expectancy ranged from 80.7 to 83.9 years, reports Reuters. 

Infant mortality rates were highest in the US, with 5.8 fatalities out of every 1,000 live births. For other countries, the average infant mortality rate was 3.6 fatalities for every 1,000 live births.

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