Here’s the real reason health care costs so much more in the US
The U.S. is famous for over-spending on health care. The nation spent 17.8 percent of its GDP on health care in 2016. Meanwhile, the average spending of 11 high-income countries assessed in a new report published in the Journal of the American Medical Association — Canada, Germany, Australia, the U.K,. Japan, Sweden, France, the Netherlands, Switzerland, Denmark and the U.S. — was only 11.5 percent.
Per capita, the U.S. spent $9,403. That’s nearly double what the others spent.
This finding offers a new explanation as to why America’s spending is so excessive. According to the researchers at the Harvard Chan School, what sets the U.S. apart may be inflated prices across the board.
In the U.S., they point out, drugs are more expensive. Doctors get paid more. Hospital services and diagnostic tests cost more. And a lot more money goes to planning, regulating and managing medical services at the administrative level.
In other areas, despite conventional wisdom, there seems to be less discrepancy between the U.S. and other countries than commonly thought.
The report challenges popular beliefs about why health care spending is so high
Experts have previously suggested high utilization rates could explain high spending in the U.S. But looking at hospital discharge rates for various procedures, such as knee and hip replacements and different types of heart surgeries, the researchers found that use of care services in the U.S. is not so different compared to other countries.
In fact, compared to the average of all the nations, Americans appear to go to the doctor less often and spend fewer days in the hospital after being admitted.
Think tanks such as the Brookings Institute have suggested that low social spending might also partly be to blame, since funding programs to assist low-income families, the elderly and the disabled would mitigate the demand for medical care. But, again, researchers did not find a substantial difference in U.S. spending on social programs.
The U.S. spends less than average but not by much.
Another popular argument is that the American system has an unnecessarily high number of specialists, who typically earn more than general physicians, and that ramps up spending. But, according to this report, “the ratio of primary care physicians to specialists was similar between the United States and other high-income countries.”
“These data suggest that many of the policy efforts in the U.S. have not been truly evidence-based,” said author Ashish Jha, a professor of global health and director of the Harvard Global Health Institute, in a press release.