Health Care Costs Rising Faster in U.S.
Monday, June 6th, 2011
A recent post discussed why health care costs keep going up. And are they ever going up! Last month a health industry study revealed that current health care costs for a family of four are nearly double what they were in 2002.
Now there is another new report, from the Kaiser Family Foundation that says costs are going up faster in the U.S. than in other industrialized nations. And that’s especially alarming because health care costs in the U.S. already are a lot higher than in other industrialized nations.
Rising medical care costs impact all of us, including those diagnosed with mesothelioma and other asbestos-related disease. Rising costs not only make health care harder to obtain; it also threatens the future of programs like Medicare and is weakening the U.S. economy.
The Kaiser Family Foundation looked at health care spending in selected member nations of the Organization for Economic Co-operation and Development (OECD). The nations in the study are Australia, Austria, Belgium, Canada, France, Germany, Italy, Japan, The Netherlands, Norway, Spain, Sweden, Switzerland, the United Kingdom, and the U.S. No third-world backwaters, in other words.
How much faster is U.S. spending going up? The report shows that in the 1970s, health care costs as a percentage of GDP were not greatly different in these 15 nations. Since then costs have gone up in all of them, but they went up dramatically more in some nations than in others.
In the U.S., the share of GDP devoted to health care spending grew from 7 percent of GDP in 1970 to 16 percent of GDP in 2008. This was by far the largest increase of the nations studied. The second highest increase was in Switzerland, which went from 5.4 percent to 10.7 percent in the same period. The least increase was in Great Britain, which went from 4.5 percent to 8.7 percent.
Of these nations, the United States and Switzerland are the only ones that don’t provide some kind of taxpayer-supported universal health care for all citizens. And the United States is the only one that expects private, for profit health insurance companies to pay most of the bills.
(In Switzerland, private insurance companies are required to offer a package of basic medical coverage at cost — meaning they are not allowed to make a profit on these policies. And Swiss citizens are required to purchase one of these basic policies. The private companies are allowed to make profits from supplemental insurance, which can be purchased voluntarily.)
But the real kicker is that in spite of our reliance on private, for-profit health insurance to pay for medical care, the U.S. government spends more on health care than many countries in which government pays for nearly everything. Of that 16 percent of GDP that is spent on health care in the U.S., 8.5 percent is paid privately, but 7.4 percent is paid by taxpayers. Canada spends 7.3 percent of GDP to provide taxpayer-paid health care for all citizens.
At the Washington Post, Ezra Klein writes,
“In other words, we’re spending more on government-provided health care than most countries where government-provided health care is pretty much all there is. In the end, what’s remarkable about the American health-care system isn’t just how much we spend but how inefficiently we spend it.”
It’s important to understand that the U.S. is not getting value for its health care dollars. Yes, we have excellent doctors and hospitals, and those who have good insurance get fine medical care. But when analysts compare such measures as cure rates, infant mortality rates, number of hospital beds per capita, availability of trauma centers, ability to manage chronic conditions, and life expectancy, the U.S. actually fares far worse than most other industrialized countries, including all of the other countries in the Kaiser study.
