America’s Health Care System at the Bottom of the Heap

August 15, 2011

By Terry Smiljanich:

We all know health care expenses have risen dramatically, not just in America but around the world, as more sophisticated and expensive medical procedures become available. America has, however, the most effective health care system in the world – right? Wrong. Compared to eighteen other major economies around the world, the United States comes in almost dead last! We spend the most by far for what almost ends up being the least effective health care.

Cost-effectiveness study

A recent study reported in the Journal of the Royal Society of Medicine compared the amounts of money spent by nineteen Western countries on health care relative to their respective gross domestic product (GDP). The authors, Professor Colin Pritchard of the Bournemouth University School of Health and Social Care, and Dr. Mark Wallace of the Latymer School of London, ranked countries by the average percentage of GDP spent on health care between 1979 and 2005. They then looked at mortality rates for “all adults” (15-74 years old) and for just the “older” population (55-74) to determine a cost-effective ratio, i.e., how much “bang for the buck” each country has been getting for the money spent. The conclusions are striking.

Increasing Health Care Costs

It will come as no surprise that health care costs have gone up everywhere. In 1980, Sweden spent nine percent of its GDP on health care. The USA came in second at 8.8%. Most countries averaged about 7.1% of GDP. In 2005, the picture had changed. The United States was far in front of all other countries, spending an average of 12.2% of its GDP for all public and private health care costs. Germany was a somewhat distant second at 9.7%, with the average for all countries standing at 7.4%. In other words, while average health care expenditures increased from 7% to 7.4%, America’s costs jumped from 8.8% to 12.2% of GDP over the same span of time.

Mortality Rates

The study then looked at trends in mortality rates for both the entire adult population (15-74) and for older people (55-74). Deaths per million population were looked at, and the authors found that mortality rates had declined in segments of this population in every country, an indication that medical science has indeed improved over the past few decades.

Utilizing standard statistical tools and analysis, the authors then ranked the same 19 countries according to their effectiveness in reducing the mortality rate for the elderly populace ages 55 to 74. Comparing the amount of money spent by each country on health care and the reduced mortality rates, the countries fell into the following ranking:

  1. Ireland
  2. United Kingdom
  3. New Zealand
  4. Austria
  5. Australia
  6. Italy
  7. Finland
  8. Japan
  9. Spain
  10. Sweden
  11. Canada
  12. Netherlands
  13. France
  14. Norway
  15. Greece
  16. Germany
  17. USA
  18. Portugal
  19. Switzerland

Conclusions

Take a look. America outspends everyone else by far on health care, and has shown the least amount of improvement on mortality rates, with the exception of Portugal and Switzerland. Why does the United States do such a poor job?

The authors give several potential reasons, including regional disparities in health care availability in a country as large as the US, the much higher rate of firearms-related homicides here, and the higher number of un-insureds we have. The study is, however, consistent with other reports that show the USA is doing a poor job of health care for its citizens. A recent UNICEF report looked at “well-being” of children among major industrialized countries (e.g. material wealth, family relationships, health care), and found the United States ranking 23rd of 24 countries reviewed.

Universal vs. Private Health Insurance

There is one factor common to the top 15 countries on the above list. They all have strong state funding of single-payer universal health care, instead of insurance based health care tied to employment. The bottom four countries – Germany, USA, Portugal and Switzerland – all depend more heavily on profit-based, private health insurance provided primarily through the employer/employee relationship.

But what about the great medical facilities within the United States? Eight of the top ten hospitals in the world are located in the United States. An Arab sheik with tons of money will come to Johns Hopkins or Massachusetts General for his cancer treatment. That gives a clue to the answer. If you have all the money in the world, America is the place to come for the best health care. If, however, you live on a budget, you’re better off in any of the other top sixteen countries on the list, than here in America.

We may not be number one in the world, or even number fifteen, but we sure don’t have any of that socialized medicine!