(NEW YORK) MintPress — As the Supreme Court continues to debate the constitutionality of some of all elements of Obamacare, a new study of 13 industrialized nations shows that the United States spends an exorbitant amount on health care compared to the rest.
The report issued by The Commonwealth Fund, reveals that the U.S. spent nearly $8,000 per person on health care services in 2009, more than Australia, Britain, Canada, Denmark, France, Germany, Japan, the Netherlands, New Zealand, Norway, Sweden and Switzerland.
The other countries spent between one-third (Japan and New Zealand) and two-thirds (Switzerland and Norway ) as much.
In addition, the U.S. devoted more than 17 percent of gross domestic product (GDP) to health care compared with 12 percent or less in all the other countries.
“When looking at other industrialized countries,” senior research associate David Squires tells Mint Press News in an e-mail, “it’s important to point out the contrast that, even though we spend so much more on health care, we’re the only country with a large uninsured population
In the U.S., public funds contribute to health care through insurance programs like Medicare and Medicaid, taxes that support employer-sponsored health insurance, delivery systems like the Veterans Health Administration and research by the National Institutes of Health.
“The aim of the report,” says Squires, “was to tease out some of the reasons why the U.S. spends so much more on health care than other countries.
Price discrepancies
One key finding: The level of expenditure is not a result of higher income, a larger elderly population, or a greater supply and use of medical personnel and hospitals.
“Contrary to what one might expect,” explains Squires, “we found that it’s not because we go to the doctor or hospital more frequently. Instead, it looks like our higher spending is largely driven by higher prices – meaning, for example, that a drug costing $100 in the U.S. may cost only $50 in England.”
Japan, which has spent the least on health care — $2,878 per capita in 2009, less than 9 percent of GDP — controls costs mainly through the aggressive regulation of prices.
“Japan operates a fee-for-service system, while offering unrestricted access to specialists and hospitals and a large supply of MRI and CT scanners,” wrote Squires.. “Rather than containing costs by restricting access, Japan instead sets health care prices to keep total health spending within a budget allotted by the government.”
Little value for money
Despite being more expensive, the quality of health care in the U.S. varies.
“Unfortunately, despite spending so much more, our health care doesn’t seem to be notably superior to care in other countries,” acknowledges Squires.
“We perform well on some measures, such as survival rates for breast cancer, but have middling and poor rates on other measures, like mortality after being admitted to the hospital for a heart attack, or presumably preventable amputations among diabetics.”
The Japanese, in fact, enjoy the longest life expectancy in the world.
Public burden
At the same time, for many American households, health care has become increasingly unaffordable. In 2010, four of 10 adults went without care because of costs and the number of either uninsured or underinsured jumped to more than 80 million.
A 2007 survey in five states found that difficulty paying medical bills contributed to 62 percent of all bankruptcies, up 50 percent from 2001. And for the average worker with employer-sponsored health insurance, growth in premiums and cost-sharing has largely wiped out wage gains over the past decade.
Rising health care spending is also detrimental to public budgets. According to Squire, if the U.S. spent the same percentage of GDP on health care as the Netherlands, the country spending the next-largest share of GDP, savings for the country as a whole would have been $750 billion in 2009 alone.
And if the U.S. spent the same share of GDP as Japan, savings would have totaled $1.25 trillion, bigger than the U.S. defense budget.
While many facets of spiraling health expenditure cannot be fully controlled, economists say fixing prices for services, which is not addressed in the latest reforms, could help.
Princeton University professor Uwe Reinhardt for one suggests implementing an “all payer” system like those in Japan, Germany and other European countries. Instead of private insurance payers negotiating prices with health care providers, who often charge different payers varying fees, all payers would negotiate with all providers to determine fees. The government for its part could make sure all parties agree to prices that are tied to the GDP.
Maryland, in fact, has operated an all-payer system for hospitals since 1977 and has seen costs per admission rise more slowly than the national average.
It seems the world’s biggest economy still has a lot to do when it comes to health care.
In addition to controlling prices, says Squires, “I think there are a lot of areas where the U.S. can learn from international experiences in health care – innovations like improving after-hours care so patients don’t have to go the ER when they get sick on nights or weekends.”
“But one thing you find looking at other countries’ health systems is that each of them is pursuing a high performance health system in their own way. We in the U.S. will find an American way.”