Health Care

Labor, administrative costs drive U.S. healthcare spending far beyond other nations

Labor, administrative costs drive U.S. healthcare spending far beyond other nations”

MIAMI, USA - The United States spends nearly twice as much on healthcare as other rich nations, largely because everything from drugs to devices to doctors' pay simply costs more, researchers said on Tuesday, March 13.

More doctor visits and hospital stays aren't the problem.

Despite beliefs to the contrary, "the U.S. has lower rates of physician visits and days spent in the hospital than other nations", said the report.

Instead, health spending may be higher in the USA because prices are steeper for drugs, medical devices, physician and nurse salaries and administrative costs to process medical claims, researchers report in JAMA. "This gap and the challenges it poses for American consumers, policymakers, and business leaders was a major impetus for healthcare reform in the US, 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).

With only 2.9 beds per 1,000 people, the USA falls way below other developed countries, especially compared to Japan's 13.2 and Germany's 8.2.

The US spends nearly twice as much as other high-income countries on health care, and yet has consistently poorer results in many areas, with the lowest life expectancy and highest infant mortality rate of all developed countries.

The researchers looked at data from 2013-2016 and found almost 18% of the USA gross domestic product was spent on healthcare. In 2016, the United States spent 17.8% of GDP, compared to 9.6%-12.4% in other countries. The US spends much more than other countries on planning, regulating, and managing health systems and services.

Per capita spending for prescription drugs in other nations ranged from $466 to $939. The U.S. was also similar concerning utilization rates for acute myocardial infarction, pneumonia, chronic obstructive pulmonary disease, hip replacement, knee replacement and coronary artery bypass graft surgery.

Common brand-name medicines were often double the price seen in other nations.

"Regardless of what is done with the money, it would be more valuable than paying high prices for a large number of CT and MRI scans, up to a third of which may be deemed unnecessary and carry radiation risks, and many expensive but not necessary surgical procedures", Emanuel writes.

The also spending much more on pharmaceutical costs. In the other countries, life expectancy ranged from 80.7 to 83.9 years. The U.S. had the shortest life expectancy and highest infant mortality rate of any country included in the analysis, as well as the highest obesity rate.

Nor is the quality much lower than in other countries.

Some individual USA states, however, have outcomes on par with other high-income countries. It says that the United State doesn't use health care than high-income countries like Germany, Canada, France and Japan.

"In addition, the reasons for these substantially higher costs have been misunderstood: These data suggest that numerous policy efforts in the USA have not been truly evidence-based".

"It is quite challenging to disentangle the share of global differences in spending driven by differences in the quantity of care used and differences in the prices paid for that care, given how hard it is to measure quality and intensity of care", Katherine Baicker, author of a separate editorial and dean of the Harris School of Public Policy at the University of Chicago, said by email.

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