How America’s Health System Stacks Up Against Other Developed Countries

How America’s Health System Stacks Up Against Other Developed Countries

REUTERS/ Jean-Paul Pelissier

One of the core disagreements between congressional Republicans and Democrats on health care reform is their perception of the existing system. By and large, Republicans are satisfied with the current system and represent those who share that view. For them, almost any expansive change without cost cuts is change for the worse; hence their opposition to the Affordable Care Act. Democrats are more inclined to think that the existing health care system is deeply flawed and in need of improvement. They represent those for whom change will largely be for the better.

One problem with this dichotomy is the lack of context. When people only have experience with the health system that exists now they may not be aware of the possible options for improvement. One way of finding out what improvements may be possible is to look at the experience of similar countries. A new study from the Commonwealth Fund does exactly that.

The other countries surveyed are Canada, the United Kingdom, Australia, New Zealand, France, Germany, Sweden, Norway, the Netherlands and Switzerland.

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On the plus side, the U.S. leads in the availability of high-end procedures and equipment. It provides 79 coronary bypass grafts per 100,000 population versus a median of 45 in all members of the Organization for Economic Cooperation and Development. The U.S. also leads in the availability of magnetic resonance imaging (MRI) machines with 103 per million population. The comparable figures for other countries are 95 in Germany, 67 in France, 50 in the Netherlands and Canada, and 24 in Australia.

But the U.S. pays a very heavy price for its emphasis on the high-end of health care—the monetary cost of health care is far higher than in any other country, it has the most complicated health system with the highest administrative costs and the actual health care delivered to a large segment of the population is very poor.

Average health care spending (insurance plus out of pocket costs) per person was $8,508 in the U.S. in 2011. The next highest spending country was Norway at $5,669—one third less. Other countries pay half of what we pay or less. The comparable figures are $4,522 for Canada, $4,495 in Germany, $4,118 in France, $3,925 in Sweden, $3,800 in Australia, $3,405 in the U.K. and $3,182 in New Zealand.

In other words, if we had almost any other country’s health system we could give every American $4,000 every year to spend on whatever they feel like. For a family of 4, that would be $16,000 per year. That is a very substantial amount given that the median household income is $51,000.

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There are many reasons why Americans pay far more for health care than those in every other country. One is that we pay our doctors more than any other country does. The average primary care physician makes $186,582 in the U.S. versus $159,532 in the U.K., $131,809 in Germany, $125,104 in Canada, $95,585 in France and $92,844 in Australia.

The gap is even larger among specialists. For example, the average orthopedic surgeon makes $442,450 in the U.S. compared with $324,138 in the U.K., $208,634 in Canada, $202,771 in Germany, $187,609 in Australia and $154,380 in France.

One would think that with such high incomes, the U.S. would have far more doctors per capita than other countries. In fact, the U.S. is at the bottom of the countries surveyed in this regard with just 2.5 physicians per 1,000 people. Sweden has 3.9, Germany and Switzerland 3.8, Norway 3.7, Australia 3.3, France 3.1, the U.K. 2.8 and New Zealand 2.6.

In many other ways as well Americans get less for their health care dollar than the citizens of other countries do. It is much harder for them to get same-day or next-day appointments with their doctor and have much greater difficulty getting after-hours care. Consequently, Americans use high-cost emergency rooms more than those in any other country do.

Other factors adding to the far higher cost of American medicine include the complexity of the system, which greatly increases the administrative cost. Most other countries have single-payer systems, but the U.S. has many different health insurance companies with many different plans, plus overlapping public programs such as Medicare, Medicaid, state plans and programs for veterans.

Therefore, American doctors spend far more time on paperwork than doctors in other countries do. This adds up to a health administrative cost of $606 per person in the U.S. France, the nation with the second heaviest health administration cost, spends just $277 per capita. In Norway the cost is just $35.

Americans pay far more for pharmaceuticals than those in other countries. Per capita spending was $995 in 2011 versus $752 in Canada, the nation with the next heaviest spending for drugs. In New Zealand the cost per year is just $298.

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The high-tech medical equipment that Americans have better access to also comes with a cost. A MRI scan costs $1,121 in the U.S. compared with less than $400 in France, the U.K. and Netherlands.

The higher cost of health insurance and health care in the U.S. means that many more Americans suffer from medical cost-related financial problems. In the past year, 37 percent of Americans have reported cost-related medical access problems. No other country reported more than 22 percent of people with such problems.

Even those with health insurance have problems paying medical expenses; 27 percent reported cost-related access problems, 15 percent said they had difficulty paying medical bills, and 42 percent spent more than $1,000 out of pocket for medical expenses.

But the highest cost of the most expensive health system is in health itself. The Commonwealth Fund survey reports a death rate of 96 per 100,000 for problems amenable to medical treatment in the U.S. These include ailments such as diabetes, stroke, heart disease and bacterial infections for those under age 75. The U.K. had the second highest death rate from such causes at 83, with many countries under 70. In France, the death rate is just 55.

The Affordable Care Act was designed to deal with these very real health problems in the American system. While obviously it is not a cure-all, it is at least an attempt to lower costs and improve health access for millions of Americans. The Republican alternative is to repeal the ACA and do nothing to reduce health costs or improve health care availability to those without insurance.

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