Usually when these papers comparing the US health system and costs to those of other developed countries are published, the point is to bash the US and usually promote some kind of government-run system, as if we don’t have enough of that with Medicare and Medicaid. What is useful about the comparisons is they can help us identify where and why the US is more expensive. I would note, however, that country comparisons require many necessary adjustments that rarely are made–adjustments for age of population, income level, minority proportion, certain health behaviors, like drug and alcohol use, smoking, gun violence, etc. When those adjustments are done, our performance on health outcomes and our spending don’t look quite so bad.
As always, we start with the proposition that health care spending has two primary components–the number of services and products used and the unit cost of those services and products. The US spent about $13,432 per person in 2023. Looking at ten other countries, the next highest was Switzerland at $9,688 and the lowest was Japan at $5,640. A recent paper from the Peterson Foundation/Kaiser Family Foundation once again demonstrates that our issue is large the unit price. The paper examines several types of service to compare their use in the US versus those ten comparison countries and relative price. (HST Paper)
The US has a very low level of in-person physician visits, the only lower country was Sweden and some countries had twice the number. Now if this related only to primary care, it might be a matter of concern, since lots of primary care may lead to early identification and treatment of health issues. But reducing specialty visits is probably a good thing. The US has the lowest use of inpatient hospitalizations and has for several years. Some countries had twice the rate of use compared to the US. And we have a below average length of stay for an inpatient hospitalization. In general, the US has done a good job of moving many procedures from an inpatient hospital setting to an outpatient or surgery center location.
The US has the second lowest rate of coronary angioplasty, a very low rate of cholesystectomy, the lowest rate by far of inpatient knee and hip replacements, which surprised me, but those procedures are increasingly done as same-day surgery. Other procedures that have moved from inpatient to outpatient settings are appendix and prostate removal. One area that is problematic for utilization in the US is excessive prescribing of drugs. And those drugs cost from two to five times as much as in other countries.
Looking at the price component, however, tells a very different story. Primary care and physician visits are far more expensive in the US as are hospitalizations and various outpatient services. The cost of a coronary angioplasty in the US is over $17,000; almost twice the cost of the next highest-priced country. And that is just the Medicare price; most health plans are paying more–astoundingly more–twice as much. The US has almost the highest rate of coronary bypass surgeries, but also again has by far the highest price for this procedure–private health plans are paying almost $90,000 compared to the average of around $25,000 in the comparison countries.
Those cholesystectomies also cost more than twice as much in the US. Inpatient hip and knee replacements in private insurers cost over twice the comparator country average. Similarly, inpatient appendix or prostate removal is far more costly in the US. While outpatient or surgery center procedures are cheaper, they still cost much more in the US than elsewhere. The US uses a slightly above average number of C-section deliveries, again at a signifcantly higher price. MRIs and PET scans are used at about an average rate in the US but for around five times the average cost. CT scans have a high rate of use in the US, but the cost differential is not as great.
The core of the cost issue is that physicians, particularly specialists, are paid much more in the US than their counterparts in other developed countries and our hospitals are run by too many and very overpaid administrative staff.
