The Health conundrum
We spend a lot on health.
But some say that, of all advanced economies, we get the least bang for our buck.
First, the spending.
Health spending is what we pay for the final consumption of health services and goods. It is spending by public and private sources, including households, on curative, rehabilitative, and long-term care; medicines; public health and prevention programs; and administration.
Health spending in the United States was 16.4 percent of GDP in 2013; the highest share in the world, says the Organization for Economic Cooperation and Development (OECD), a group of 34 advanced countries.
The OECD average was about 9 percent.
The next biggest spenders, Germany, France, Canada, the Netherlands, and Denmark, spent around 10-11 percent; the smallest, Turkey, Estonia, and Mexico, around 5-6 percent.
We are talking huge. If you consider that our GDP is about one-fifth of the world’s, we spent, on average, $8,713 on each man, woman, and child.
Runner-up Switzerland spent $6,325; the next largest spender, Norway, $5,823. On the opposite end, Turkey and Mexico spent $941 and $1,048 each.
We were also number one in per-capita spending on drugs. (But not in drug spending as share of health spending, 26th; and not in out-pocket payments, 28th.)
I worked with current prices, turned into U.S. dollars and adjusted for purchasing power. It seemed like a reasonably apples-to-apples approach.
As we zoom in on numbers a bit, one central issue begs notice; the relative uniqueness of the American system.
Most OECD countries provide health care through the public sector. While specifics vary greatly from country to country, in general, governments collect the money, then either provide or pay for health care.
The United States, in contrast, delegates a big part of this, 52 percent, to the private sector. The OECD average is 27 percent.
Countries like us do exist, but generally not among the most developed. They are India, Indonesia, Chile, Brazil, Russia, and South Africa, and tend to have less than stellar outcomes.
Next, the outcomes.
In most advanced countries, the more you spend on health, the more you get. An increase in spending correlates directly and proportionately to better outcomes.
Judged on simple but critical indicators, our money seems to lose its power to improve outcomes after a while.
The indicators are: infant mortality; life expectancy at birth and later ages; potential years of life lost to preventable deaths before age 70; risk factors like obesity and smoking; the availability of resources such as doctors, nurses, and hospital beds…
These factors probably do not tell the whole story and can even mislead (for example, people in some countries might conceivably under-report cancer deaths for cultural reasons).
Still, it’s worth a look.
The United States ranked 26th out of 34 in life expectancy at birth for men and 29th for women; 20th in life expectancy at age 65 for men and 25th for women; 17th in mortality from cardiovascular diseases; and 25th in mortality from cancer.
We did well on tobacco and alcohol, where you want to rank low; 31st and 23rd.
But we topped the charts in obesity, at number one.
(Our all-knowing son, who reads quaint stuff, tried to console me about it. “But, mom,” he said, “Tonga (a tiny Polynesian kingdom) is worse!” He added, tactlessly, “they have three people there, and they are all fat.”)
We were 28th in the number of doctors per 1,000 people; 9th in the number of nurses; and 25th in hospital beds.
On years of life lost to preventable deaths, an index that factors in societal violence, American men had outcomes 31 percent worse than the OECD average. Outcomes for American women were 45 percent worse; on a par with Mexico.
The United States was also the big outlier in infant mortality, with outcomes 50 percent worse.
How come we do so poorly?
Or do we?
Someone once told me that if I need a top-notch high-tech medical procedure (costly!), I could do no better than live here. As that person put it, those Arab sheikhs fly to the Mayo Clinic, not we to Dubai.
Is it things like that, Cadillac services that benefit few but we want nonetheless, that skew the ratio of outlay to outcomes?
Are there uniquely-American factors, hard-to-quantify cultural reasons, that drive up costs, lower outcomes, or both?
Profit margins for insurers? Medical bureaucracy? Malpractice suits, rampant in an exceptionally litigious society? Malpractice insurance costs?
To someone who spent a good part of her life abroad, it’s fairly evident that medical professionals here enjoy a higher prestige, and financial rewards, than anywhere else.
I can speculate, and many have, about our obsession with youth and perfection directing resources into services others consider optional; preventive care and tests that are the norm here but luxuries elsewhere; the extent of resources devoted to end-of-life care…
Numbers may not lie, but they can be twisted and bent.
Some will use them to argue for a larger government role, for taking the market out of health care.
Others will jump to the private sector’s defense, stressing the positives of choice, of letting people get exactly what they want, be it nutrition advice or perfect teeth.
I have no agenda of either kind.
I just want you to think.
Kremena Spengler is a former academic and journalist with the BTA, the Bulgarian national news agency, and Reuters. After a bit of world travel, she moved to live a quiet life and raise children in New Ulm, joining The Journal in 1997. She likes to think her views are not that unusual for a naturalized American.