It's been known for years that the US spends about twice as much on health care and has the lowest quality compared to other high-income countries. Why? Our sick and wounded do not go into the hospital in any greater numbers than those in comparable countries. And although our socia So why do our sick people cost more and die younger? Our social spending (i.e. on the elderly, education, family, and housing) is slightly lower than average, but it is not the worst.
A new study comparing our system with that of 10 other comparably wealthy countries may help identify the basis for our horrendous costs and dismal quality. The nations were the UK, Germany, Sweden, France, the Netherlands, Switzerland, Denmark, Canada, Japan, and Australia. Of note, all of the comparison countries have universal health care, which is a major factor in their cost advantage (as well as quality).
Drug Prices Are too High
In general, our prescription numbers are actually lower than in the other countries compared here. However, we spend more on drugs for each person, $1443 compared to a range of $466 to $939 in the other high-income countries. One reason is our far higher preference for brand-name drugs over their generic siblings. And one factor for this is the courtship between drug companies and US doctors. In 2015 nearly half of US physicians received more than $2.4 billion from the drugs companies, typically in the form of meals and small gifts that sales reps spent on individual doctors. According to some research, when these interactions are restricted generic prescriptions go up and brand sales go down. But there's more. Our brand-name prescriptions also cost a lot more than in the rest of world. For example a person in the Netherlands with acid reflux spends $23 for Nexium; her fellow American sufferer will pay $215. Why? It's simple. Other countries with large unified health care systems have the clout to negotiate with pharma. With our fractured system and Medicare restrictions against negotiation, we don't.
Doctors Get Paid Too Much
Our physician and nurse workforce rate is about the same as in other rich countries, and contrary to previous research, we appear to have the same proportion of primary care physicians to specialists.
However, the US pays all of them a lot more. For example, an American family doctor earns an average of about $200,000 compared to a range of $87,000 to $154,000 for their peers in other countries. Furthermore, our specialists are paid about 40% more than in the other nations. One reason (but not the only one) for this: American doctors leaving medical school drag with them an average debt of about $175,000, with 25% owing more than $200,000. Given the interest on these debts, primary care physicians (who are paid the least among US docs) typically never close the gap. Many of our comparison countries largely bear the cost of medical school and in most of them tuition costs are far less than ours. Medical school costs aside, most doctors who aren't salaried charge per procedure or per patient, with these fees set by a committee made of physicians—almost all of whom are specialists. In many other countries physician compensation is set through collective negotiations with the government or large healthcare systems.
Drowning in Paperwork
Our cacophony of multiple insurer types—both private and government—and discordant reporting regulations have created a horrendous Kafkan bureaucracy that tortures anyone working in the health care system. Nearly three quarters of US doctors spend 10 hours or more a week on paperwork, and this bureaucratic overload is the primary reason why nearly half of them report being burned out. And the paperwork is costly. Administrative costs were estimated to be over $300 billion this year. They comprise 8% of our total health care costs compared to 1% to 3% in other counties. Here's where a single- or a consistent-payer system could go a long way to reducing both the costs and emotional burden placed on heatlhcare staff.
Over-Testing and Over-Treating
We actually spend less on patients who are in the hospital than all other comparable countries except Canada. However, common surgeries and testing procedures are more costly, and we perform far too many of them. For example, we toss an excessive number of our patients through MRI and CT scanners. Comparing our usage to the other countries, MRI imaging is used in the US at a rate of 118 per 1000 patients compared to 82 in the comparison countries; CT scanners by 245 per 1000 in the US versus 151 in other countries.
One reason for our over-testing and -treating? Doctors get paid for piecemeal work. The more they do, the more they earn. (Remember those fees-for-service that the specialists themselves set?) In addition, they fear being sued if they miss a serious ailment. It's not in their interest to perform fewer procedures or fewer tests. And don't forget, those excessive treatments and tests are not making us healthier. Too often, in fact, these procedures themselves can lead to harm. One solution is to change the way doctors are paid (more on this in another blog), so that they are encouraged to use best evidence and not best paycheck when making decisions. And, although not popular with Democrats, changing the liability laws could help.
Reducing costs is not just strong-arming pharma (although it would help). The following are some suggested steps.
First and foremost, establish a universal system of health care (not necessarily single-payer, but more on that later). Such a system will have the capability to:
1 Negotiate drug prices.
2. Reduce administrative tasks with a simplified bureaucracy
3. Establish a process for physician collective bargaining with the major payers (government or a few non-profit insurers)
4. Reduce medical school debt with either free tuition (particularly for primary care physicians), fewer years in school, and/or creating a process for debt forgiveness.
5. Provide evidence-based guidelines for physicians to use to determine appropriate tests and treatments
6, Create a rational process of lawsuits