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Huge cost of US healthcare driven by drug prices and salaries Sky-high prices of everything make US healthcare the world's most expensive
(about 4 hours later)
The United States spends twice as much on healthcare as 10 other high-income nations, driven by the high price of everything from prescription drugs to doctors’ salaries, a new study in the Journal of the American Medical Association finds.The United States spends twice as much on healthcare as 10 other high-income nations, driven by the high price of everything from prescription drugs to doctors’ salaries, a new study in the Journal of the American Medical Association finds.
Recent attempts to reform American healthcare have assigned blame for the high cost of care to nearly every sector – from drug companies to hospitals to health insurers.Recent attempts to reform American healthcare have assigned blame for the high cost of care to nearly every sector – from drug companies to hospitals to health insurers.
However, a co-author of the new study said those arguments ignore the “800-pound gorilla”: sky-high prices everywhere.However, a co-author of the new study said those arguments ignore the “800-pound gorilla”: sky-high prices everywhere.
“Most countries get to lower prices one of two ways: they either have a very strong price setter, usually a government agency, or more efficient markets,” said Dr Ashish Jha, co-author of the study by researchers at Harvard’s TH Chan School of Public Health. “The US has figured out how to do the worst of both.”“Most countries get to lower prices one of two ways: they either have a very strong price setter, usually a government agency, or more efficient markets,” said Dr Ashish Jha, co-author of the study by researchers at Harvard’s TH Chan School of Public Health. “The US has figured out how to do the worst of both.”
In the study, America was compared to 10 other countries: the United Kingdom, Canada, Germany, Australia, Japan, Sweden, France, Denmark, the Netherlands and Switzerland.In the study, America was compared to 10 other countries: the United Kingdom, Canada, Germany, Australia, Japan, Sweden, France, Denmark, the Netherlands and Switzerland.
Researchers used 98 indicators to compare countries across seven areas: general spending, population health, structural capacity, utilization, pharmaceuticals, access and quality and equity. The majority of the data came from international organizations, such as the Organization for Economic Cooperation and Development. What researchers found was not a single sector with high prices, but that every sector had extraordinary price tags.Researchers used 98 indicators to compare countries across seven areas: general spending, population health, structural capacity, utilization, pharmaceuticals, access and quality and equity. The majority of the data came from international organizations, such as the Organization for Economic Cooperation and Development. What researchers found was not a single sector with high prices, but that every sector had extraordinary price tags.
For example, the average salary for a general practice physician in the other countries was between $86,607 and $154,126. In the US, the average salary was $218,173.For example, the average salary for a general practice physician in the other countries was between $86,607 and $154,126. In the US, the average salary was $218,173.
Per capita spending for prescription drugs in other nations ranged from $466 to $939. In the US, per capita spending was $1,443.Per capita spending for prescription drugs in other nations ranged from $466 to $939. In the US, per capita spending was $1,443.
The US also spends more on administrative costs. Other nations spend between 1%-3% to administer their health plans. Administrative costs are 8% of total health spending in the US.The US also spends more on administrative costs. Other nations spend between 1%-3% to administer their health plans. Administrative costs are 8% of total health spending in the US.
This results in US health costs that, as a percentage of gross domestic product, are nearly double that of other nations. In 2016, the US spent 17.8% of GDP, compared to 9.6%-12.4% in other countries.This results in US health costs that, as a percentage of gross domestic product, are nearly double that of other nations. In 2016, the US spent 17.8% of GDP, compared to 9.6%-12.4% in other countries.
At the same time, America often had the worst population health outcomes, and worst overall health coverage.At the same time, America often had the worst population health outcomes, and worst overall health coverage.
The US ranked last in life expectancy; had the worst maternal mortality rates (nearly triple that of the United Kingdom); more infant deaths than any other country, and a high rate of low birth weight babies.The US ranked last in life expectancy; had the worst maternal mortality rates (nearly triple that of the United Kingdom); more infant deaths than any other country, and a high rate of low birth weight babies.
Other countries had universal, or near universal, health insurance rates. The US ranked last. Just 90% of Americans have health insurance, leaving about 27 million people without access to healthcare.Other countries had universal, or near universal, health insurance rates. The US ranked last. Just 90% of Americans have health insurance, leaving about 27 million people without access to healthcare.
Jha said whether the US moves toward more private healthcare, as advocated by Republicans, or to single-payer healthcare, as advocated by liberal Democrats, price tags on all American health services need to be addressed.Jha said whether the US moves toward more private healthcare, as advocated by Republicans, or to single-payer healthcare, as advocated by liberal Democrats, price tags on all American health services need to be addressed.
“I’m happy to move in either direction that will allow for lower prices, but right now we’re not even having that debate,” said Jha. “We’re fighting over all sorts of other things.”“I’m happy to move in either direction that will allow for lower prices, but right now we’re not even having that debate,” said Jha. “We’re fighting over all sorts of other things.”
The study’s possible weaknesses include comparability of data, with different countries having “modest” differences in data collection.The study’s possible weaknesses include comparability of data, with different countries having “modest” differences in data collection.
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