Care to guess how the USA ranks in healthcare against its peers?
The U.S. spends the most on health care as a percentage of GDP with the worst outcome compared with other developed countries.
We ranked 46th out of 48 countries in this study. The U.S. spends $8,608 per capita on healthcare while the top rated country, Hong Kong, spends just $1,409. Hong Kong also has the highest life expectancy at 83.4 years while the U.S. is in the middle of the pack at 78.6 years.
Each country was ranked on three criteria: life expectancy (weighted 60%), relative per capita cost of health care (30%); and absolute per capita cost of health care (10%). Countries were scored on each criterion and the scores were weighted and summed to obtain their efficiency scores. Relative cost is health cost as a percentage of GDP. Absolute cost is total health expenditure, which covers preventive and curative health services, family planning, nutrition activities and emergency aid. Included were countries with populations of at least five million, GDP per capita of at least $5,000 and life expectancy of at least 70 years.
If you object to Hong Kong being classified as a country, the next five highest ranking countries are Singapore, Israel, Japan, Spain, and Italy. The highest per capita annual healthcare expense in this group is in Japan, at $3,958 – less than half that of the U.S. Average life expectancies in these countries range from 81.8 to 82.6.
We are spending more and getting less than just about any other country in the world. When I hear people like politicians and business leaders say, “We have the best healthcare system in the world,” I wonder if they don’t have access to these facts, if they are speaking about the excellent care available to the privileged few with excellent healthcare benefits, or if they are in denial about the reality of our situation.
Takeaways: There are lots of opportunities (i.e., problems that need solving) when it comes to healthcare economics in the U.S. The media should reports facts like this Bloomberg article and call out politicians who crow that “we have the best…” We need big solutions to solve this big problem. Perhaps we can learn by modeling best practices from other countries. If you (or whomever) doesn’t like Obamacare (a modest first step), what’s your proposed solution? It’s pretty clear that continuing the policies of the past 70 years will not result in positive change.
You can point fingers in lots of different places: defensive medicine, intervention-based reimbursement, poor diet and lifestyles of Americans, medical procedure pricing opacity, outrageous compensation for hospital and medical insurer CEOs, Medicare restrictions on drug price negotiating, direct-to-consumer drug marketing, overbuilding of hospitals, and on and on. Medical device overuse and misuse is part of the problem as well, although the entire industry is “only” 6% of total healthcare expenditures.
The Affordable Care Act, although flawed, is at least a first attempt to address some of these issues. Early reports indicate that it may be having positive effects already.