Critics of the United States’ health care system, particularly academic critics, most of whom are government-run, single-payer system advocates, constantly attempt to buttress their arguments by comparing us with other developed countries. While our spending is typically the single biggest focus, quality and health outcomes also tend to be disparaged by these critics. And they often conflate the performance of the health system in delivering care with the performance of our public health functions. Public health deals more with health behaviors and keeping people healthy, as opposed to diagnosing and treating diseases and conditions, which is the province of the health care system. These two functions, while they affect each other, should be evaluated separately.
A fair comparison of the performance of any health care system would be how it performs in delivering health care to the same population. In other words, you need to adjust for sociodemographic, health status and other variables and see how a system performs on that identical population. Comparing the United States, with its much higher minority populations, much greater rate of obesity, higher levels of drug and alcohol abuse and of homicides, suicides and other poor health behaviors, with Japan, for example, with its very different characteristics in those regards, won’t tell you anything about the relative performance of the health care system, although it may give you useful data about the countries’ respective public health functions.
Our public health is abominable in most respects—we eat too much, we exercise too little, we abuse drugs and alcohol at high levels, we shoot and stab each other, we don’t follow recommended preventive care guidelines—but this occurs disproportionately in certain segments of the population. No real effort has been made to penalize these bad health behaviors or incent better ones, which ultimately are the responsibility of the individual. And many of those so concerned about high spending in our system are the same people who have no interest in taking meaningful steps to improve health behaviors. God forbid that we ever point out that some groups have a heavier responsibility for many of our public health issues. So our public health system is not producing good results, but it does produce lots of disease and bad health for the health care system to treat.
Looking at the performance of the health care system in regard to costs of diagnosing and treating diseases, the U.S. certainly looks like an outlier at first blush. A new report from the International Federation of Health Plans and the Health Care Cost Institute discusses these spending differences. But it only focuses on the cost of services, not total spending. Spending has two primary components, how much of each service or product is used and how much each unit of those services or products costs. Price is important, but it doesn’t tell you everything about the performance of a health system, even when you are only considering spending.
And our prices are quite high. Looking at drugs, for example, in comparison to nine other countries, prices here are far higher, sometimes two times more, for every brand medication, but a few countries have higher prices for generic drugs. For inpatient hospital procedures, contrasted with 11 other nations, we see a similar pattern—our price is often twice as much or more. None of the comparison countries had a higher price for a single one of the common procedures used in the analysis. The picture changes a bit for frequent outpatient procedures. Here, while the U.S. tends to the higher price end, we are not consistently the highest price country. New Zealand in particular often has higher prices for these services than those in the United States. So our prices are very high for brand-name drugs and hospitalizations, but we have in the ballpark or even low prices for some outpatient services.
Other research consistently shows that the United States actually performs relatively well in regard to utilization within a case—our system does a good job of avoiding unnecessary or inappropriate care and this suggests that the United States’ high spending is almost exclusively due to price differences and to more cases due to our poor health behaviors. Patients generally have good outcomes in our system, which is one reason why people come from around the world to have serious illnesses treated here. It is true that our spending per person is very high compared to other systems, but what is the price for better outcomes? And since price is one primary cause of our spending divergence from other countries, are you willing to have your doctors paid substantially less? I have set out elsewhere my views on how hospital and drug spending could be better controlled, but even after those measures were taken, prices would remain higher than in other nations. Our high prices may be to an extent the literal price we pay for having good health care outcomes.
Kevin Roche runs The Healthy Skeptic, a website about the health care system, and has many years of experience working in the health care industry. If you have health care-related questions, you can contact Kevin at xuebpur@urnygul-fxrcgvp.pbz and he may answer the question in a column. Read more from Kevin Roche at his website: healthy-skeptic.com
Kevin Roche
Kevin Roche runs The Healthy Skeptic, a website about the health care system, and has many years of experience working in the health care industry.
