Why Does America Spend More on Health Care?

From Drugs.com - March 13, 2018

Why Does America Spend More on Health Care?

TUESDAY, March 13, 2018 -- It's well-known that the United States spends a lot more for its health care than other industrialized nations do.

But a new study claims that some of the purported explanations for why America's health care bill is so huge simply do not wash.

The United States does not use more health care than high-income peers like Canada, Germany, France and Japan, said study co-author Liana Woskie, assistant director of the Harvard Global Health Institute's strategic initiative on quality.

Nor does America have too many high-paid specialists. "At least compared to peers, we have a pretty similar mix of primary care to specialists," Woskie added.

Instead, it looks as though the United States pays more because it faces higher price tags for drugs, tests, office visits and administration, Woskie said.

"We need to better understand why prices are so high and dive into that into much more detail, because some of the previous explanations may not actually be what's driving the U.S.'s spending," she said.

For this study, Woskie and her colleagues pulled together comprehensive data comparing U.S. health care against that of 10 other leading countries -- the United Kingdom, Canada, Germany, Australia, Japan, Sweden, France, the Netherlands, Switzerland and Denmark.

The investigators found that the United States spends nearly twice as much of its wealth on health care -- 17.8 percent of its gross domestic product, compared with between 9.6 percent and 12.4 percent in other countries.

That money is not buying the United States better health, however. For example, America had the lowest life expectancy and the highest infant mortality when compared to the other countries.

The United States has about as many doctors and nurses as the other nations, and similar rates of treatment.

But cost varied widely when it came to drugs. Pharmaceutical spending was $1,443 per person in the United States, compared to a range of $466 to $939 in other countries.

Americans also appear to pay more for diagnostic tests and office visits, Woskie said.

"We actually seem to have about the same number of tests and visits as other countries do. It's not necessarily that a lot of it is unnecessary, because our volume is similar. It appears we are spending more for the same stuff," Woskie said.

Doctors and nurses are also paid more generously in the United States. For example, a general physician earns an average of $218,173 in the United States, compared with between $86,607 and $154,126 in other countries.

Additionally, the United States spends more on the administrative framework used to operate its health care system -- about 8 percent of health care spending, compared to 1 percent to 3 percent elsewhere.

Continue reading at Drugs.com »