Medical costs have risen everywhere in recent decades, but they’ve exploded in the United States. While most industrialized countries spend between 6 percent and 10 percent of gross domestic product on health care, the United States spends 13 percent. Our annual medical bills total about $4,600 per person–more than twice the median figure for 30 industrialized nations. The amount we spend privately on insurance premiums, deductibles and out-of-pocket expenses ($2,580) is five times the median. Yet, as the Hopkins team reports in the current issue of Health Affairs, Americans receive less care by most measures. On a per capita basis, we rack up fewer physician visits than people in comparable countries, and we spend less time in the hospital.
Where does the money go? Some costly procedures, such as dialysis and coronary angioplasty, are used more liberally here–and our fragmented reimbursement system raises administrative costs. But that’s only part of the story. We also pay higher rates for the goods and services we get. National health programs can bargain aggressively over what to pay for drugs, devices and services, the Hop-kins researchers observe. America’s smaller regional health plans lack that kind of leverage, and their members pay accordingly. “U.S. policy makers need to reflect on what Americans are getting for their greater health spending,” the researchers declare. Their own conclusion: “It’s the prices, stupid.”
