News Roundup [abridged Versions Appear In The Paper Journal]

US health system doesn't give value for money, report says

BMJ 2005; 331 doi: (Published 21 July 2005) Cite this as: BMJ 2005;331:179
  1. Janice Hopkins Tanne
  1. New York

    More is spent per person on health care in the United States than in any of the other 29 industrialised countries in the Organization for Economic Cooperation and Development (OECD). The reason is higher prices in the United States, not malpractice litigation and defensive medicine, says an annual study published in Health Affairs (2005;24:903-14).

    The study also refutes the argument that high spending in the US means that healthcare capacity is high. It says that many other OECD countries have a higher number of doctors, nurses and hospital beds per population and their spending is much lower than that in the US.

    “It's the prices, stupid,” the authors argued in a previous paper (Health Affairs 2003;22:89-105). US prices are higher because “there's no single entity to negotiate with providers on prices,” as there is in the United Kingdom and many other countries, said the lead author, Gerard Anderson, a professor at the Johns Hopkins Bloomberg School of Public Health, Baltimore.

    In 2002 the amount spent per person on health care in the US was $5267 (£3006; £4370)—53% more than any other country and 140% above the median ($2193) for OECD countries. The US spent 14.6% of its gross domestic product on health care. Only Switzerland and Germany spent more than 10%. The UK spent $2160 per person (7.7% of gross domestic product).

    According to OECD figures, in 2002 the United States had 2.9 hospital beds per 1,000 people, compared to 3.9 in the United Kingdom and in Switzerland, 3.7 in Australia, and 3.2 in Canada. Figures for Japan and Germany were not available.

    Also according to OECD figures, the US had 2.4 physicians per 1,000 population, compared to 2.1 in the UK, 3.3 in Germany, 3.6 in Switzerland, 2.5 in Australia, and 2.0 in Japan. The US had 7.9 nurses per 1,000 population, compared to 8.2 in Japan, 9.2 in the UK, 9.4 in Canada, 9.9 in Germany, 10.4 in Australia, and 10.7 in Switzerland.

    Evidence to support the authors' case comes from another study that showed that coronary artery bypass grafting cost 83% more in US hospitals than in Canadian ones, but inpatient mortality was the same. That study covered 12 000 patients treated in US and Canadian hospitals (Archives of Internal Medicine 2005;165:1506-13).

    Japan had by far the highest number per population of magnetic resonance imaging and computed tomography scanners (respectively 35.3 and 92.6 per million people), but it also spent a relatively modest $2077 per person on health (7.8% of its gross domestic product).

    The United States had 8.2 magnetic resonance imaging and 12.8 computed tomography scanners per million people, compared to 4.0 and 5.8 in the UK, 4.2 and 9.7 in Canada, 5.5 and 13.3 in Germany, and 14.1 and 18.0 in Switzerland. Australia had 4.7 magnetic resonance imaging scanners per million people; figures on computed tomography scanners were not available.

    All OECD countries except the US, Mexico, and Turkey have universal health care provided by the state or by a combination of state spending and private insurance, Dr Anderson told the BMJ.

    Common explanations for the high costs of health in the US—no waiting lists for elective surgery and malpractice costs—don't hold water, Dr Anderson said.

    Waiting lists have been suggested as a way to explain containing supply of health care and thus reducing costs. However, waiting lists were not a problem in many OECD countries, and these countries still had lower per capita spending on health care than the US. The treatments that have waiting lists in some OECD countries account for only 3% of health spending, so a lack of waiting lists was unlikely to greatly increase health spending in countries that did not have waiting lists.

    Malpractice payments represent less than 0.5% of health spending in the UK, Australia, Canada, and the US. Although the US had more malpractice claims per 1000 people, payments (both settlements and court judgments) were highest in the UK, where the average settlement in 2001 was $411 171. Such payments were $309 417 in Canada, $265 103 in the US; and $97 014 in Australia.

    “The two most important reasons for higher US spending appear to be higher incomes and higher medical care prices,” the authors write in the report.

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