U.S. outspends other industrialized nations on healthcare with mixed results

May 23, 2012

We have the highest healthcare costs despite being younger and smoking less than average. Discover the one big problem causing costs to skyrocket.

The United States spends more on healthcare than other industrialized nations, but it’s not because of our higher income, aging population, or higher utilization of resources, according to a new report by the Commonwealth Fund, a private foundation aimed at promoting high-performance healthcare.

Primary care physician (PCP) spending consumes a larger portion of total healthcare costs than does spending on pharmaceuticals in the United States, and PCPs typically command higher fees for office visits here than in Australia, Canada, France, Germany, and the United Kingdom (UK), according to the analysis.

That finding on PCP earnings held true regardless of the country’s healthcare payment system, the Commonwealth Fund reports, noting that U.S. PCPs and orthopedic doctors out-earned colleagues in the five compared countries.

Domestic data were compared with that of 13 other industrialized nations for the analysis, according to the Commonwealth Fund. In comparison to the United States, Japan had the lowest healthcare costs, and they were controlled primarily through aggressive price regulation.

On the whole, higher healthcare spending in the United States is likely the result of higher prices, more obesity, and more accessible technology, the report says. But the higher costs of U.S. healthcare don’t guarantee consistent quality, the analysis reports. Overall quality is variable, with better-than-average cancer survival rates but the worst rates of preventable deaths associated with asthma and diabetes.

Only 13% of the U.S. population was older than 65, compared with the median 16% in other countries, and U.S. patients were least likely to be daily smokers. But one-third of the U.S. population is obese-more than other countries in the analysis-and 10% of all medical spending in 2008 went toward obesity-related costs.

The report notes that U.S. healthcare spending reached nearly $8,000 per capita, or more than 17% of gross domestic product (GDP), in 2009, compared with 12% of GDP or less in the other countries studied.

The Commonwealth Fund reports that the U.S. has fewer physicians per capita,  fewer patient consultations, fewer hospital beds, shorter stays for acute conditions, and fewer patient discharges than the other countries in the study. The data indicate that U.S. hospital stays are more resource-intensive than in other countries and that prices for hospital services are higher.

Additionally, although generic drugs are cheaper, commonly prescribed brand-name drugs cost roughly one-third more in the United States than in Canada and Germany and more than twice as much as the same drugs in Australia, France, the Netherlands, New Zealand, and the UK. Diagnostic fees in the United States also are higher.

But efforts to control U.S. healthcare spending come at a cost-usually involving restricted access and less drug research-and the analysis cautions that any efforts to rein in healthcare spending should be weighed carefully against their effect on patients.

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