Why do Americans pay more for healthcare than the residents of other countries do?
The answer may sound like a punch line, but it's no joke: We pay more because prices are higher.
That's the simple, bottom-line conclusion of a study in the July-August issue of the journal Health Affairs, which found that the high costs of healthcare in America are attributable to ballooning price tags on everything from prescription drugs and hospital stays to doctor visits and diagnostic tests. The study dismisses the overall impact of a number of other supposed culprits, including multimillion-dollar malpractice settlements and the intrinsic costs that are said to come with quick access to specialty services.
"There is a popular misconception that we pay much more for healthcare in the United States compared to European and other industrialized countries because malpractice claims drive up costs and there are waiting lists in most other countries," said lead author Gerard Anderson, a professor in the department of health policy and management at the Johns Hopkins Bloom-berg School of Public Health. "But what we have found is that we pay more for healthcare for the simple reason that prices for health services are significantly higher in the United States than they are elsewhere."
In a survey of 30 nations that belong to the Organization for Economic Cooperation and Development, or OECD, researchers found that the U.S. spent $5,267 per capita for healthcare in 2002-or $1,821 more than the second largest spender, Switzerland.
In all, U.S. per capita spending was about 140% higher than the median level for the other countries surveyed. The average price per day in 2002 for a hospital stay in the U.S.: $2,434. It was $870 in Canada.
What's more, the study found no evidence that Americans get more services for those high prices. In fact, Americans actually have access to fewer healthcare resources, including high-tech equipment like magnetic resonance imaging and computed tomography scanners, compared with residents of other countries. And the number of U.S. physicians per capita (2.4 per 1,000) was below the OECD median of 3.1 in 2001. The nurse supply in the U.S. also lagged below other countries.
Karen Davis, president of the New York-based Commonwealth Fund, which sponsored the study, said the research indicates "that the U.S. does not get commensurate value for its healthcare dollar."
Healthcare spending accounted for 14.6% of the U.S. gross domestic product in 2002. Only Switzerland and Germany spent more than 10% of their GDP on healthcare that year. Meanwhile, malpractice awards amounted to only $16 per capita in 2001, compared with $12 in the United Kingdom and $10 in Australia, the study said.
Indeed, while the number of malpractice claims per 1,000 was slightly higher in the U.S., the average payment per settlement in the U.S. ($265,103) was lower than in either the U.K. ($411,171) or Canada ($309,417).
The study also concluded that the impact of defensive medicine, which often is triggered by concerns over malpractice lawsuits, plays a relatively small role in overall costs. Researchers point out that the highest estimate of defensive medicine costs is 9%, which barely makes a dent in the gaping differential in costs between the U.S. and other OECD countries.