MONDAY, Jan. 7, 2019 — Higher costs, not better patient care, explain why the United States spends much more on health care than other developed countries, a new study indicates.
U.S. health care spending was $9,892 per person in 2016. That was about 25 percent more than second-place Switzerland’s $7,919 and more than twice as high as Canada’s $4,753, researchers found.
It was also twice what Americans spent in 2000, and 145 percent higher than the Organization for Economic Cooperation and Development (OECD) median of $4,033. The OECD includes 34 countries.
“In spite of all the efforts in the U.S. to control health spending over the past 25 years, the story remains the same — the U.S. remains the most expensive because of the prices the U.S. pays for health services,” said study author Gerard Anderson. He’s a professor at Johns Hopkins Bloomberg School of Public Health in Baltimore.
“It’s not that we’re getting more; it’s that we’re paying much more,” Anderson said in a school news release.
Evaluating the drivers behind soaring U.S. spending, his team cited higher drug prices, higher salaries for doctors and nurses, higher hospital administration costs and higher prices for many medical services.
Despite those higher costs, Americans have less access to many health care services than residents of other OECD countries, according to the study.
In 2015, for example, there were 7.9 practicing nurses and 2.6 practicing physicians for every 1,000 Americans, compared to the OECD medians of 9.9 nurses and 3.2 physicians.
That year, the United States had only 7.5 new medical school graduates per 100,000 people compared to the OECD median of 12.1. And the nation had just 2.5 acute care hospital beds per 1,000 people compared to the OECD median of 3.4.
Yet the United States ranked second in the number of MRI machines per person and third in the number of CT scanners per person, suggesting relatively high use of these expensive resources. (Japan ranked first in both categories, but was one of the lowest overall health care spenders in the OECD in 2016).
Among the other findings:
- U.S. health spending outpaced that of the other OECD countries between 2000 and 2016 — growing an average of 2.8 percent a year compared with the OECD median annual increase of 2.6 percent.
- Inflation-adjusted spending on pharmaceuticals rose 3.8 percent annually in the United States versus an OECD median of 1.1 percent.
- In 2016, U.S. health care spending accounted for more than 17 percent of gross domestic product, compared with an OECD median of less than 9 percent.
The findings appear in the January issue of the journal Health Affairs.
More information
The Kaiser Family Foundation has more on health costs.
Posted: January 2019
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