Labor, administrative costs drive U.S. healthcare spending far beyond other nations

Wednesday, 14 Mar, 2018

Despite this, the U.S. still lags behind all other developed countries when it comes to the quality of said healthcare. In an editorial accompanying the new study, Katherine Baicker and Amitabh Chandra of the University of Chicago and Harvard note that the latest analysis doesn't delve into the qualitative details of health care treatments Americans get compared to people in other countries.

Per capita spending on pharmaceuticals was $1,443 in the US, far higher than the range of $466 to $939 in the other countries studied.

Of course, much ink has been spilled over health care in the past decades, and the causes are complex and hard to thoroughly assess.

The US ranked last in life expectancy; had the worst maternal mortality rates (nearly triple that of the United Kingdom); more infant deaths than any other country, and a high rate of low birth weight babies.

Despite America's higher spending, citizens have worse health outcomes.

Contrary to popular belief, high utilization of healthcare services and low spending on social services are not the main reasons for the costs and lack of efficiency.

Researchers also pointed out many myths regarding why USA health care is so pricey.

'The data suggest two main factors drive higher healthcare spending in the U.S.: higher prices across a wide range of health care services, and administrative costs.,' Dr Jha added.

The American numbers for physician and nursing workforce and number of hospital beds were similar to the other nations. Yes and no. Salaries paid to doctors and nurses in the USA were more than twice as much as other countries.

The good news is that despite poor overall outcomes, when people are sick, the quality of delivered healthcare is quite high.

As a community of leading scientists, educators, and students, we work together to take innovative ideas from the laboratory to people's lives-not only making scientific breakthroughs, but also working to change individual behaviors, public policies, and health care practices. It's that Americans pay more for everything from administrative costs to doctors and drugs. Instead, an effort to reduce prices and administrative costs is needed.

The U.S. had a lower percentage of its population covered by health insurance (90 percent) than those other rich countries, where 99.8 percent to 100 percent were covered.

It's not news that the US health care system fails to deliver substantially better care, or "health outcomes", for its higher cost.

Several studies have already found that counterintuitive measures, such as increasing social spending, can actually reduce expenses in the long term.

'There is a belief that the USA population uses a lot more health care services than other countries, thus driving costs. Prices of drugs like cholesterol-lowering Crestor or diabetes medication Lantus were more than twice as high in the US than in other countries.

The problem is that despite investing heavily in health care, Americans don't have access to the quality they're paying for.

The researchers conclude that it all comes down to prices. What's needed is a reduction in unnecessary costs and an investment in the areas where the country is still lagging behind.

Contrary to commonly held beliefs, high utilization of healthcare services and low spending on social services do not appear to play a significant role in higher USA healthcare costs. "Worldwide comparisons are very valuable-they allow for reflection on national performance and serve to promote accountability", said first author Irene Papanicolas, visiting assistant professor in the Department of Health Policy and Management at Harvard Chan School.