Why is U.S. health care so costly compared to other developed countries? A recently published report provides some insights.
In a study of 11 countries, Harvard researchers found that while the United States has the highest health costs relative to its GDP, its use of services is average. More specifically, the U.S. ranks lower than nearly every other country in doctors’ visits, hospitalizations, hospital days, and consultative services.
The difference is that the U.S. uses more expensive technologies with high numbers of surgical and cardiovascular procedures and imaging studies.
Other sources of high costs include brand-name drugs and administration of insurance programs. And while the U.S. has fewer physicians per capita, our physicians earn more than counterparts in every other nation.
With fewer doctors, hospitalizations, and office visits, one might conclude that U.S. health care is poor. In many respects, that is true. The U.S. has a low life expectancy and high maternal and infant mortality compared to other wealthy nations.
One explanation is that the U.S population is larger and more geographically and economically diverse compared to its peer countries. As the Harvard group explained, if the state of Minnesota were compared to a similarly prosperous European country, it could hold its own. In contrast, Mississippi, a poorer state, would rank much lower.
The message is that if you cannot access the U.S. health system due to income or distance, your health is at risk. The ACA tried to fix this problem by expanding insurance eligibility with federal support. Surprisingly, some states whose citizens would have benefitted refused to cooperate.
The Harvard report suggests two remedies for curbing health care costs: price control of new brand-name drugs and curbing the proliferation and costs of new technology. These ideas are not new. As the famous economist Uwe Rinehart once wrote, “It’s the prices, stupid.”
While some countries like Great Britain have taken measures to control such costs, little has been done in the U.S. We are left with a dysfunctional system that creates high costs, expensive drugs, and technology, and lacks a stable national health insurance plan. Is it any surprise the U.S. health care system has been ranked last among developed countries?
Worse, we have another embarrassing statistic to report: medical bankruptcy. As health care costs continue to rise, many patients can’t afford to pay their medical bills. A recent study revealed that many patients deal not only with hefty hospital bills, but also lost wages and even unemployment when they are ill. It’s also important to remember that medical bills remain the number one reason for bankruptcy in the United States.
Four years ago, experts in medical bankruptcy grew tired of seeing families lose their homes because of medical debt. To solve this problem, these experts founded a nonprofit organization called RIP Medical Debt (RMD).
Like a mortgage, some medical debt is discounted and sold on the open market as a commodity. In some cases, the debt can be purchased for pennies on the dollar. The buyers then own the debt and recover whatever payment they can.
RMD purchases such debt and then raises donations to settle the account. For example, a donation of $15,000 can absolve $1M of medical debt. Over four years, the organization has retired millions of dollars of debt for patients and their families. While I applaud this program, its very existence speaks volumes about the inadequacies of health insurance in the U.S.
As I write this blog, the stock market has stumbled due to the looming threat of trade warfare between the United States and China. If this crisis continues, the price of imported goods will rise for American businesses and consumers. If so, companies may trim their health care benefits, and shift the burden onto employees through higher premiums and higher deductibles. Such changes will nudge many employees even closer to financial ruin if they get sick.
The current national political agenda is aimed at creating more jobs for Americans. Unless those jobs offer adequate health insurance, medical bills will devour wages. If elected officials are serious about helping Americans, they should stop playing political football with health insurance.
Only a stable single-payer system, similar to Medicare, will keep the average American family secure in times of illness. If armed with national price control like Medicare, such a plan can tackle the escalation of health care costs.
Mark Kelley is a pulmonologist and founder, HealthWeb Navigator, where this article originally appeared.
Image credit: Shutterstock.com
