There is little like the joy that comes from being both vindicated and exercising your confirmation bias at the same time. Research published in journal once again attempts to figure out why the US has higher health care spending than other developed countries and the answer once again, as we have often said, is that we have higher prices. (JAMA Article) The authors compared the US with other high-income countries on a variety of utilization and cost measures (it should be noted that there can be differences in completeness and accuracy of coding and data collection and analysis practices between countries, but it is unlikely those significantly affect the conclusions reached). Without going into great detail, our utilization rates are consistent with those of other nations, and often are very good, especially when adjusted for appropriate factors. Our health behaviors are mixed; for example, we have low rates of smoking but high levels of obesity. While we have high levels per population of some health resources, especially technological ones, other basic ones like number of hospital beds and physicians, are comparable to the other nations. Administrative costs are higher in the US and that is an important factor, but I suspect those costs are more hidden in other countries. We pay our doctors substantially more. (anyone really for cutting physician pay, think that will make them happier and deliver better quality?) Not specifically addressed by this study, but a clear factor is the billions of excessive compensation to non-profit health system executives and administrators.
The policy implications of the sources of high US health spending are important. If price is the primary source of not just high spending but greater spending growth, than attacking price is what matters. We need to lower the unit cost of delivering services. As I have suggested in the past, it is not really hard to figure out how to do that, just hard for politicians who want to keep the money flowing from every constituency they can find. So fix the political system if you want to see the will to attack the issue. Health system provider consolidation has to be stopped and reversed. Every study finds that increased concentration leads to higher prices, both through exercise of market power and less urgency to control costs. Dramatically cut permitted salaries for executives and administrators at allegedly non-profit health systems and government hospitals. Use more lower cost providers–nurse practitioners, physician assistants–and use telehealth whenever possible. Stop letting drug and device companies abuse their government-granted monopolies. Those steps would make a difference on price.
And we do need to continue to attack inappropriate care where it exists, but also to ensure that all the appropriate care a patient needs is delivered. That is a wash, I believe. What also will lower costs is reinforcing personal responsibility for health and health care. Engage in unhealthy behaviors and expect to bear the consequences–pay more or don’t get free care. Our health spending may or may not be a real public policy issue; it may be that a country could decide to spend a lot on health care; but it is clearly a tax and out-of-pocket burden to many citizens, and that needs to be addressed. Good luck with that as long as we let politicians suck up tens of millions of dollars in contributions from the health system players.