Tuesday, June 24, 2014

USA: Worse than Two Countries in Health Costs

Every so often, it’s worth taking a look at how badly we’ve allowed ourselves to distort reality. We generally think that health care costs in the U.S. are about what they are in the rest of the world, or maybe just a bit worse. We seldom allow ourselves to see the true state of affairs. Accordingly, when a wake-up call comes along like the recent announcement from the Commonwealth Fund:
--we either don’t know what to do with it at all, or quickly look for someplace to hide.

A while ago, I was glancing at a talk given by Michael Fine, head of public health in Rhode Island. He made the interesting point that health care in the U.S., calculated on a per capita basis, costs more than it does in the United Kingdom and Japan. Let me be very clear about this: The average annual cost of health care, per person, in the UK, plus the average annual cost of health care, per person, in Japan, is less than the cost of health care, per person, in the U.S.
Maybe a few Americans have an idea that health care costs more in the U.S. than elsewhere, and that we actually get less for what we spend here than elsewhere. But I rather doubt that most Americans realize just how bad it is—that people in two other advanced nations of the world pay as much as we do per person (actually, not quite so much) for health care.

I was reminded of these figures thanks to the Commonwealth Fund’s handy reminder. They don’t include Japan in their list of 11 countries, but they give several other examples. You can assemble the figures for “almost as much as the U.S. spends on health per person per year” in several different ways:
The U.K. or Sweden or New Zealand or Australia

Canada or France or Germany

Either approach would come in less than the U.S., which tops all of the countries at $8508 per person per year. The next highest country is Norway, far back at $5669. (The first batch of countries I picked all spend between $3000 and 4000 per person per year; the second set spend between $4000 and $5000.)
The remainder of the report is not terribly auspicious for the U.S. America often spends the most money and gets the worst results. A few areas show some modest improvement since the last time the people looked, but generally things are down in the cellar and mostly staying there.

For many decades we have been used to hearing that the U.S. has “the best health care system in the world.” This has pretty much gone by the boards, though we’ll still find some dumb politico repeating it occasionally. But how far we have sunk from that status is not seen clearly by the vast majority of citizens.
Pharmaceutical costs play a relatively small role in the excessive costs of U.S. health care, making up only about 10 percent of American total health care costs. But the average American has no idea whatsoever of how incredibly pricey American health care is, compared to any other country.