Price disparity with other countries underscores need for reform
A quick blog on a recent Peterson-KFF Health Tracker Chart Collection comparing U.S. healthcare prices and utilization against those in other developed nations. I like these periodic looks at prices and utilization throughout the developed world because it reveals at least one of the biggest reasons our healthcare system is in crisis or at least tumbling toward it.
In my book, The Healthcare Labyrinth, I make the case that three key reforms are needed to the healthcare system – price reform, affordable universal access, and a pivot to primary care and care management. In many ways, the three go together. As an example, price reform is needed to ensure affordable universal access. And only with affordable universal access can we really get back to the rebuilding of primary care, wellness, and prevention. Wellness and prevention mean care at lower cost settings, thereby shifting services from high-cost settings.
In a recent blog here ( https://www.healthcarelabyrinth.com/my-biggest-worry-erosion-of-coverage/ ), I made the case that we could see a major erosion of coverage due to ongoing increases in price, utilization, and costs as well as the coverage reductions in the One Big Beautiful Bill Act (OBBBA). This involves both a rise in the uninsured but also the underinsured. The underinsured have gaps in coverage throughout the year or deductibles and cost-sharing are so high that families cannot reasonably access some or most of their coverage. Because of the cost of insurance and the cost of care in general, people delay or forego care. The problem will get worse over the next decade as price, utilization, and costs continue to increase.
How much more expensive is the American healthcare system? The Health Tracker Charts paint an ugly situation. It finds that we spend more than any other large, developed country. As it notes, costs ultimately are driven by price and utilization. In this case, the study says price in America is the big culprit for higher costs than in other nations.
The Tracker looks at American prices and utilization against 11 other wealthy countries. It finds that the U.S. has higher prices for many healthcare services. However, utilization of many services, (e.g., doctor’s visits, number and length of hospital stays, and a variety of inpatient surgeries) is lower than in many comparable countries. The study says this has been the case for some time.
Some of the specific findings:
- The U.S. spends nearly twice as much on healthcare per person as the average of peer nations. The U.S. spent $14,432 in 2023, while the comparable country average was $7,393, with a range of $5,640 to $9,688. So, America’s costs are actually anywhere from about 49% to 156% more, with an average of about 95% more.
- The study says the U.S. spent about 16.7% of gross domestic product (GDP) on healthcare in 2023, while the comparative country average was 11%.
- Compared to its peers, the U.S. has about half as many in-person doctor consultations per person. This goes to my concerns about primary care.
- The U.S. also has fewer hospital discharges per person than most comparable countries. As well, the average length of stay is shorter.
- The U.S. has fewer coronary angioplasty surgeries but costs per surgery are multiple times more. The U.S. had 130 per 100,000 in 2002, while the comparable country average was 238. However, U.S. costs per surgery were $17,183 for public programs and $34,504 for private insurance compared with an average of $5,849 in other countries.
- The rate of obtaining coronary bypass surgery is the highest in the U.S. (except for one country) and costs are 78% more in America for government programs and 259% more for private insurance.
- Like angioplasty, the U.S. performs half as many inpatient knee replacement surgeries and hip replacements as peer nations, while paying more per surgery on average.
- And as I have noted in the past, the first ten Medicare negotiated drug prices are manyfolds above prices in other countries.
#healthcare #healthcarereform
— Marc S. Ryan
