(Reuters Health)—The U.S. spends about twice what other high-income nations do on healthcare, but has the lowest life expectancy and the highest infant mortality rates, a new study suggests.
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 U.S. because prices are steeper for drugs, medical devices, physician and nurse salaries and administrative costs to process medical claims, researchers reported March 13 online in JAMA.¹
“There’s no doubt that administrative complexity and higher drug prices both matter—as do higher prices for pretty much everything in U.S. healthcare,” says lead study author Irene Papanicolas of the London School of Economics and the Harvard T.H. 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 U.S. healthcare system and the lack of price transparency across the system,” Papanicolas says by email.
For the study, researchers examined international data from 2013 to 2016 comparing the U.S. with 10 other high-income countries: the U.K., Canada, Germany, Australia, Japan, Sweden, France, Denmark, the Netherlands and Switzerland.
In 2016, the U.S. spent 17.8% of its gross domestic product (GDP) on healthcare. Other countries’ spending ranged from a low of 9.6% of GDP in Australia to a high of 12.4% of GDP in Switzerland.
A large part of this was administrative costs, which accounted for 8% of GDP in the U.S., more than double the average of 3% of GDP.
At the same time, the U.S. 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.
U.S. spending was also higher for imaging and for many of the most common medical procedures, such as knee replacements, surgical cesarean births and surgeries to repair or unclog blood vessels.
If the U.S. 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.
“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.
