Technology helps drive high cost of U.S. healthcare

Higher prices and greater use of technology appear to be the main factors driving the high rates of U.S. spending on healthcare, rather than greater use of physician and hospital services, according to a new study from the Commonwealth Fund. The study found the U.S. spends more on healthcare than 12 other industrialized countries, yet does not provide “notably superior” care.

[See also: U.S. healthcare performance score declines]

The U.S. spent nearly $8,000 per person in 2009 on healthcare services, while other countries in the study spent between one-third (Japan and New Zealand) and two-thirds (Norway and Switzerland) as much. While the U.S. performs well on breast and colorectal cancer survival rates, it has among the highest rates of potentially preventable deaths from asthma and amputations due to diabetes, and rates that are no better than average for in-hospital deaths from heart attack and stroke.

The report, “Explaining High Health Care Spending in the United States: An International Comparison of Supply, Utilization, Prices, and Quality,” presents analysis of prices and healthcare spending in 13 industrialized countries.

[See also: Scorecard reveals wide disparities in care across the country]

U.S. healthcare spending amounted to more than 17 percent of gross domestic product (GDP) in 2009, compared with 12 percent or less in other study countries. Japan’s spending, which was the lowest, amounted to less than 9 percent of GDP, according to study author David Squires, senior research associate at The Commonwealth Fund.

All of the countries in the study, except for the U.S., provide universal healthcare, and all struggle with rising health costs. The level of healthcare spending in the U.S., however, stands apart. If the U.S. were to spend the same share of its GDP on healthcare as the Netherlands – the country spending the next-largest share of GDP – the savings would have been $750 billion in 2009.

U.S. hospital stays ‘far more’ expensive

High U.S. spending on healthcare does not seem to be explained by either greater supply or higher utilization of healthcare services. There were 2.4 physicians per 100,000 population in the U.S. in 2009, fewer than in all the countries in the study except Japan.

The U.S. also had the fewest doctor consultations (3.9 per capita) of any country except Sweden. Relative to the other countries in the study, the U.S also had few hospital beds, short lengths of stay for acute care, and few hospital discharges per 1,000 population. On the other hand, U.S. hospital stays were far more expensive than those in other countries – more than $18,000 per discharge. By comparison, the cost per discharge in Canada was about $13,000, while in Sweden, Australia, New Zealand, France and Germany, it was less than $10,000.

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