Why does the U.S. spend so much more on healthcare than other countries?
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Other industrialized countries such as U.K., the Netherlands, Japan, etc.
The U.S. spent 17.8% of its gross domestic product on healthcare in 2016, and spending in the other countries ranged from 9.6% to 12.4%
Yet it ranked low on population health outcomes such as life expectancy.
In other words, the U.S. spends far more than any other country, while the life expectancy of the American population is shorter than in other countries.
Looking at spending on health per capita, the U.S. still leads at $9,403 per capita, almost triple the U.K. spending.
Eight percent of U.S. healthcare spending went to administrative costs incurred by private and public insurers,compared to an average of 3% in the other 10 wealthy countries. That is 20 times more than what France spent on administrative costs per person in dollar amounts.
The U.S. is unique in that it has thousands of private and public payers that each set their own rates with providers and drugmakers. The other 10 countries either have a single public health plan or have private insurers that pay the same nationally negotiated prices.
Contrary to widespread belief, U.S. medical utilization rates are not that different overall from rates in other advanced countries with much lower total spending. The U.S. was in the middle of the pack on hospitalization rates for heart attacks, chronic obstructive pulmonary disease, and pneumonia.
In addition, the U.S. spent lower percentage on inpatient and long-term care than most of the other countries.
It was on prices where the U.S. was a clear outlier. Driven by sharply higher prices for brand-name drugs, the U.S. had per-capita pharmaceutical spending more than twice as high as average spending in the other 10 countries—$1,443 versus $680, the study found.
The U.S. also pays physicians and nurses significantly more than other wealthy countries do, which further hikes prices and spending, according to the JAMA study. The average pay for specialist physicians in the U.S. was $316,000 in 2016, compared with $182,657 in all 11 of the countries surveyed.
Generalist physicians in the U.S. earned $218,173, compared with an average of $133,723 in all 11 countries.
U.S. nurses earned $74,160 on average, compared with $51,795 in all 11 countries.
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