Public healthIdentifying the key drivers of high U.S. healthcare spending
The major drivers of high healthcare costs in the U.S. appear to be higher prices for nearly everything—from physician and hospital services to diagnostic tests to pharmaceuticals—and administrative complexity. The study confirmed that the U.S. has substantially higher spending, worse population health outcomes, and worse access to care than other wealthy countries.
The major drivers of high healthcare costs in the U.S. appear to be higher prices for nearly everything—from physician and hospital services to diagnostic tests to pharmaceuticals—and administrative complexity.
The new findings, from Harvard T. H. Chan School of Public Health, the Harvard Global Health Institute, and the London School of Economics, suggest that common explanations as to why healthcare costs are so high—such as the notions that the United States has too many doctor visits, hospitalizations, procedures, and specialists, and spends too little on social services that could mitigate healthcare needs—may be wrong.
The study will be published 13 March 2018 in JAMA (Journal of the American Medical Association).
“We know that the U.S. is an outlier in healthcare costs, spending twice as much as peer nations to deliver care. This gap and the challenges it poses for American consumers, policymakers, and business leaders was a major impetus for healthcare reform in the United States, including delivery reforms implemented as part of the Affordable Care Act,” said senior author Ashish Jha, K.T. Li Professor of Global Health at Harvard Chan School and Director of the Harvard Global Health Institute (HGHI). “In addition, the reasons for these substantially higher costs have been misunderstood: These data suggest that many of the policy efforts in the U.S. have not been truly evidence-based.”
Harvard T. H. Chan School of Public Health says that the researchers, using international data primarily from 2013-16, the researchers compared the United States with ten other high-income countries—the United Kingdom, Canada, Germany, Australia, Japan, Sweden, France, Denmark, the Netherlands, and Switzerland—on approximately 100 metrics that underpin healthcare spending.
The study confirmed that the U.S. has substantially higher spending, worse population health outcomes, and worse access to care than other wealthy countries. For example, in 2016, the United States spent 17.8 percent of its gross domestic product on healthcare, while other countries ranged from 9.6 percent (Australia) to 12.4 percent (Switzerland). Life expectancy in the United States was the lowest of all eleven countries in the study, at 78.8 years; the range for other countries was 80.7-83.9 years. The proportion of the U.S. population with health insurance was 90 percent, lower than all the other countries, which ranged from 99 percent-100 percent coverage.
But commonly held beliefs for these differences appear at odds with the evidence, the study found. Key findings included:
