Health care status and health care costs international comparisons

 This is a review on the subject leveraging the information provided by a presentation titled "Multinational Comparisons of Health Systems Data, 2020" by Roosa Tikkanen and Katherine Fields from The Commonwealth Fund. 

Among developed countries Americans are by far the unhealthiest with: 

a) obesity rates far higher than any of the other shown among OECD countries; and 

b) a far greater % of individuals with multiple chronic conditions.  

On a stand alone basis, an unhealthier population should lead to higher health care costs. 

 

 

Because of Americans worse health, the resulting American lifespan is far shorter than among any of the other shown OECD countries.  On a stand alone basis, it may cause health care costs to be relatively lower.  

Americans utilization of health care services seem relatively lower than other OECD countries.  On a stand alone basis, this should translate into lower health care costs. 

On a relative basis, it appears Americans utilize their respective health care systems much less than their international counterparts.  On a relative basis, this should lead to Americans incurring lower health care costs.  

The lower utilization is captured by: 

a) Average number of physicians' visits per capita; and 

b) Average length of stay at hospital.

In summary, if we combine all those factors together, based on the mentioned "inputs" we may expect American health care costs to be somewhat in line with other OECD countries.  In other words, Americans' worse health pushing health care costs upward may be at least partly compensated by Americans lower utilization pushing these same health care costs downward.  

So, next let's see how those health care costs compare.  No matter how you look at it US health care costs are a huge outlier and way higher than the ones of their OECD countries counterparts. 

Of additional concern is that these costs are growing far faster as a % of GDP than for the other countries.  Back in 1980, US health care costs relative to GDP were in line or close to the ones in Germany, and Sweden.  Forty years later, US health care costs relative to GDP are 45% higher than in Germany and 56% higher than in Sweden. 

As shown on graph below, per capita Americans spend a lot more than any of the shown OECD countries.

As shown above, the US Government funded health care costs at around $5,000 are pretty much in line with the other countries.  American out-of-pocket costs (funded by private citizen) is also not that far out of line with other OECD countries.  But, it is the privately funded costs that are way out of line with other countries at over $4,000 per capita vs. much less than $900 for any of the other countries.  

The cause for such high privately funded US costs are multiple.  They include: 

a) US Medical schools are far more expensive.  See comparative costs for a slightly different set of countries from the Medscape International Compensation Report 2019.  Many European countries not shown below have either free Medical schools or provided at a nominal cost. 

b) US doctors earn far more than their counterparts in other countries.  This is in part for their need to recover their much higher cost of education.  See comparative costs for a slightly different set of countries from the Medscape International Compensation Report 2019. 
 

c) The US is the most litigious society.  This is associated with very costly malpractice insurance premium and the need to practice "defensive" medicine which may lead to over testing to protect against malpractice lawsuits.

d) The US large private health care system is "for profit" driven by shareholder returns and other Wall Street driven economic incentives that are often conflicting with what is best for the patient from an effectiveness and efficiency standpoint.  This "for profit" system has also lead to a greater concentration within the hospital industry and related doctors' networks increasing the oligopolistic market price power of such entities. 

e) US regulations are often further exacerbating the private sector health care costs.  For instance, Government programs such as Medicare and Medicaid are prevented from negotiating for lower drug prices.  This is probably unique among OECD countries.   

In conclusion, the US is associated with: 

a) a far unhealthier population (is that just a worst input, or a worst outcome?); 

b) a lower utilization rate of health care services; and 

c) a far more expensive health care sector whose costs are not only far higher than anywhere else; but, they are also increasing far faster.