Labor, administrative costs drive USA healthcare spending far beyond other nations

American are spending more on health care but why

Labor, administrative costs drive USA healthcare spending far beyond other nations

"There's something funky about the US system that's not just about the administrative inefficiencies of having more than one payer", Woskie said.

In addition, despite poor population health outcomes, quality of healthcare delivered once people are sick is high in the U.S.

The US also spends more on administrative costs.

Prescription drug prices in the USA, for example, were consistently higher than those in any of the other countries, sometimes commanding double the next-highest cost.

The findings were published March 13 in the Journal of the American Medical Association.

This results in USA health costs that, as a percentage of gross domestic product, are almost double that of other nations.

The US ranked last in life expectancy; had the worst maternal mortality rates (nearly triple that of the United Kingdom); more infant deaths than any other country, and a high rate of low birth weight babies. For example, in 2016, the USA spent 17.8% of its gross domestic product on healthcare, while other countries ranged from 9.6% (Australia) to 12.4% (Switzerland). The U.S. insured population of 90% was also well below the other countries that ranged from 99% to 100%.

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The U.S. also has more uninsured citizens than any of the countries examined, with about 10 percent of Americans lacking insurance coverage. "At least compared to peers, we have a pretty similar mix of primary care to specialists", Woskie added.

Belief: The U.S. provides too much inpatient hospital care.

The US spends about three times more on healthcare, per capita, than the UK.

But overall spending is far higher.

Evidence: The U.S. does spend a bit less on social services than other countries but is not an outlier. 'We expect the paper to generate a discussion around the role of the high price of healthcare services in the United States and about ways to lower those prices while maintaining or even improving quality'.

However, the USA had higher utilization of magnetic resonance imaging and CT scans compared to the others. The US actually has excellent healthcare for those who have heart attacks or strokes but is below average in avoidable hospitalizations for things like diabetes and asthma.

What does explain higher spending in the administrative complexity and high prices across a wide range of healthcare services.

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Additionally, the United States spends more on the administrative framework used to operate its health care system - about 8 percent of health care spending, compared to 1 percent to 3 percent elsewhere.

Doctors and nurses made more money in the US than in the other countries, with nonspecialist physicians getting salaries of about $218,000, compared to an average of about $123,000 for eight other countries in the study. For several commonly used brand-name pharmaceuticals, the US had substantially higher prices than other countries, often double the next highest price.

They found that the main drivers of these prices are higher salaries for physicians and nurse, with U.S. medical doctors making around $218,173 compared with a range of $86,607 to $154,126 in the other countries.

"As the USA continues to struggle with high healthcare spending, it is critical that we make progress on curtailing these costs. Worldwide comparisons are very valuable-they allow for reflection on national performance and serve to promote accountability", said first author Irene Papanicolas, visiting assistant professor in the Department of Health Policy and Management at Harvard Chan School.

Liana Woskie, assistant director of the Harvard Global Health Institute's strategic initiative on quality, was a co-author of the study.

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"Different health systems are producing very different outcomes, but one should have a note of caution in observing those differences and jumping immediately to a policy prescription, because policy prescriptions are going to require much more information about what's under the hood", Baicker said.

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