If one judges by statistics and performance scorecards alone, in the United States, healthcare means high cost and low quality.
The expenditures are enormous. Healthcare spending in the United States accounts for around 17 percent of gross domestic product (GDP), and the U.S. has the world’s largest. Other advanced countries spend between 9 and 11 percent of their considerably smaller GDPs. Historically, U.S. healthcare spending has grown faster than in other advanced countries. From 1980 until 2020, healthcare cost as a percentage of GDP doubled, but in other countries, it went up by only 2 percent. Healthcare has been a growth industry, so to speak.
Doctor compensation is uneven, and in the United States, there are some very wealthy doctors. The top 1 percent make $4.1 million per year. The top 25 percent make $871,000. The average, however, is $350,000, which is less than many computer programmers or social media workers. In high-tax states, when income and property tax are combined, $350,000 does not get very far, because the tax rate is more than one-half. So, except for a very few MDs, going into medicine is not a path to wealth. We must assume that the primary motivation at the heart of many medical personnel is altruistic humanism.
In addition, U.S. doctors have significant expenses not found in some other countries. For example, they pay big for malpractice insurance. For many, premiums range from $4,000 to $12,000 per year. But surgeons may pay $50,000 and OB-GYNS may pay more than $200,000 per year.
These incredible costs, which appear to be a phenomenon found only in the United States, have their etiology in the exorbitant litigation nightmare. In legal circles, malpractice litigation and product liability are major “industries,” and juries can be counted on to award very substantial damages.
When a number of benchmark measurements are taken into account, we see that out of 11 advanced countries – Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom – U.S. healthcare is in last place, according to the Commonwealth Fund, which examined dozens of variables to make its assessment.
By many crucial measures, the United States gets very poor scores. It is lowest in access to care, lowest in administrative efficiency, lowest in equity, and lowest in healthcare outcomes. Also, the gap between the U.S. and other nations is significant.
It may surprise some that the U.S. ranks very low on the ability of citizens to get same-day care or after-hours care.
The United States is the only high-income country with no universal health insurance. Thirty million are uninsured; 40 million are chronically under-insured. The U.S. has the second-highest out-of-pocket expenses.
The system of private health insurance in the United States often receives acidic criticism. “Gotcha” health insurance rules surprise patients with a much higher level of claim rejection, and this often is found out after the cost has been incurred, so consequently it is passed to the patient. This is the precise opposite of what insurance is designed to do. Repeatedly, U.S. doctors have more problems getting medication or treatment for their patients, because insurance does not allow them to. This “pre-authorization” process causes major problems. Often well-known and effective off-label treatments are turned down because the insurance carrier will only approve what the Food and Drug Administration (FDA) certifies.
The management of healthcare claims and payments in the U.S. is another major headache. In comparison to other countries, U.S. citizens spend the most time doing healthcare-related paperwork. The U.S. is the only country in the world that employs an army of paid specialists to help citizens navigate the medical bureaucracy. Often, legal counsel is required, particularly when appeals against coverage are involved.
If equity is measured by how good healthcare is for a patient, depending on how rich they are, then the U.S. is by far the worst. Even its higher-income citizens have access problems equivalent to the least wealthy in the second-worst country (New Zealand). The breakdown of immigration may lead to further change. With the flood of 8 million or so non-citizens who have entered the country, once they are provided government-funded healthcare and put in the statistics, the equity picture will be much worse.
The overall results are not stellar. Far from it. In the U.S., relatively more people have a “negative patient outcome” – that is, they die. Mortality is 250 per 100,000. The next-highest country is only around 150. Switzerland is 125 – one-half of the U.S. number. Public health also has a mixed track record. For example, U.S. COVID deaths were higher than in Nigeria, which had no national vaccination program.
It is not all negative. Far from it. The U.S. has relatively high influenza vaccination rates. Its record on surgery is excellent. For example, U.S. patients experience lower rates of postoperative sepsis after abdominal surgery.
It is not an exaggeration to say that the U.S. leads the world in medical innovation. The high costs are part of the costs of that investment. High prices for pharmaceuticals finance the research and development (R&D) needed to develop new cures.
The U.S. also probably has deployed on average the most advanced medical information systems in the world. For example, the incredible investments made in computerization result in superior e-Methods for filling prescriptions. The U.S. excels in keeping track of details.
All services given to a patient, everyone involved, how much time was spent, what observations were made, the 24-7 monitoring telemetry of the patient’s condition, visitor logs, to name only a few factors. We count and measure almost everything that happens to a patient. This ocean of data will form the foundation for application of artificial intelligence to allow for big data-mining and other innovations.
In sum, the seemingly excessive expenditures on information technology are setting the stage for the evolution of smart hospitals, and ultimately, better healthcare.
The U.S. healthcare system is evolving at its own pace. It is complex, and designed to accommodate a wide range of cultural, economic, business, and political interests. It is set up to pour a significant amount of cash into investments for R&D and innovation. It could be that Americans are spending more because they are investing more and innovating more. After all, mere statistics never give the entire story. Nevertheless, if we go by the statistics and benchmarks alone, the U.S. is far from getting its money’s worth.
As many Europeans say: “the Americans always get it right, but only after trying every other option.”
Imagine receiving notice that your healthcare organization faces a potential multimillion-dollar repayment demand based on the review of just 100 claims. This scenario, playing out
Some of you may have read my article from last week kindly published as a special bulletin. For those who did not, let me recap.
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