If U.S. health care spending is so outrageous, are we getting the BEST?

In today’s heated political and economic debates, healthcare reform and healthcare spending remain a hot topic of conversation – and rightfully so!

Why is it that while the U.S. spent over $8,000 per capita on health care in 2010 (almost 50% more than Norway and Switzerland in 2nd and 3rd place), per OECD ratings, we deliver only average level of care based on U.S. lower life expectancy, lower than Switzerland or Norway. Life expectancy graph puts the U.S. roughly in the middle of the developed countries in life expectancy at birth (the longest gevity is in Japan). How Does the United States Compare page 1.

The problem with that is that other developed countries who show even higher life expectancy than the U.S. are able to bring their population to such age for a fraction (or at least for 50% less) of total health care cost than here in the U.S. It shows that the huge per capital spending does NOT necessarily assure or ensure longer gevity delivered through better care or more advanced technological treatments.

So WHY does health care cost so much in the U.S.?

The answer comes under the cloak of science, as the most significant contributor to U.S. health care cost growth is technology innovation & medical advancement. Clear and simple. We have the best diagnostics, imaging, new-surgery-techniques, technological possibilities and acute care treatments & capabilities in the world – bar none. The fact that we are also a wealthy country contributes to our income growth meaning that the wealthier the country – the more of healthcare consumer spending and insurance-induced demand there is.

It stands to reason that while new medical technology may be expensive, when used in time and appropriately, it does extend patients lives, improves their quality of life which in turn makes them live longer and makes them more productive. So technology – it’s a go! But the need for increased healthcare efficiency with curbed spending will bring a major strain on the U.S. health system in the coming years.

While the U.S. has the best diagnostic and acute health services in the world, we are lacking in preventive care and in management of chronic diseases and conditions affecting a large segment of U.S. (aging) population. Additionally, the wealthiest country in the world and we have around 50 million un-insured people from working families! Yes, you heard right, a vast majority are from working families – as in low-income workers unable to afford private or employer-based health plans premiums. Kaiser Family Foundation Primer (2010) states that 50% of ALL health care spending is used to treat 5% of the population and they are the people with 3+ chronic diseases needing ongoing medical & nursing care, list of medications, follow-up doctor’s visits and other services. http://www.kff.org/insurance/upload/7670-03.pdf

Needless to say that the un-insured have overall much worse health conditions as, due to financial constrains, they do not go see doctors with first symptoms, do not get medications to correct or manage conditions, do not go for tests or follow ups to see how such condition(s) can be treated or fixed or improved. So such condition(s) grow in silence and when finally there is a life-threatening event – they will go to emergency rooms where they will get the care including all those technology innovation & medical advancement tests, images, diagnostic procedures and latest treatments, but they will also get a bill for all that technology innovation & medical advancement. And anybody who went through ER and spent a couple of days in a hospital knows the amount I am taking about here! And without insurance plan to help cover the large amount, they are left with a stark total! http://www.kff.org/uninsured/upload/7451-06.pdf

Let’s not forget, these un-insured are not insured not because they don’t want to or feel like getting a health insurance, but because their low-income jobs leave them unable to pay for private or employer-sponsored health plans and not eligible for Medicaid and too young for Medicare (over 65 y.o.)  Yes, it is true, hospitals can write something off, but on average, it still leaves the low-income un-insured with a bill of about 1/3 of the hospital cost. And good luck with that!


10 thoughts on “If U.S. health care spending is so outrageous, are we getting the BEST?

  1. An excellent article. As a public health professional, I have been disturbed by these issues. I believe there is more involved in the inflated cost than support and development of technology, but that is a small issue in the big picture.

    • Anne,thanks so much for reading my article and for taking the time to respond to me. I appreciate it.
      The problems of U.S. Health care system are much wider, that is for sure, but based on Kaiser Foundation study, the rising cost of medical technology and medical advancement is responsible for about 60-70% of our rising healthcare cost.
      I am currently taking Affordable Care Act course and we were discussing the technology and medical advancement issue at length.
      I also thought it was the amount of uninsured, the needs of aging population or the increasing amount of ‘babyboomers’ that was “responsible” for rising healthcare cost, and I was not the only one, however, the studies presented and used in writing the healthcare reform showed a different reality.
      On one hand it is wonderful and I am very proud to be a part of an industry that is the best in the world and can deliver miracles (in acute care), but we have rising problems and needs in managing chronic conditions and especially ongoing management of patients with 3+ chronic diseases. As our population ages, the need for appropriate, effective and efficient chronic care management will be imperative. And clearly that is something we are not so very competent. Yet.

  2. Pingback: Is ‘population diversity & behaviors’ to blame for lower U.S. life expectancy…? | marketahouskova

  3. I am always glad to find someone else that is passionate about the access to affordable healthcare, and the health of the population! Yes, currently 3 out of 4 dollars in healthcare are spent on chronic diseases: heart disease and stroke, diabetes, lung disease, Alzheimers. (http://www.cdc.gov/nccdphp/overview.htm) Treatments may prolong life, but quality of life is decreased.

    Not only are these chronic diseases disabling to the patients and costly to the medical system, but the cause (risk factors) that lead to them are increasing: Obesity, a primary (risk) factor in diabetes and heart disease has doubled in the last 20 years in adults. Our pediatric population, 2-11 has almost tripled in obesity, 12-19 has more than tripled. http://www.cdc.gov/nccdphp/dnpa/obesity

    Type II diabetes is no longer “adult onset” diabetes – it is frequently seen in overweight and obese children. How can we address the issue of the the obesity in this country? How can we create a healthy productive environment that promotes rationale eating habits? I have been addressing this issue for years.

    The increasing cost of healthcare due to advances in “healthcare technology and advancement” – and I admit I have not had time to read Kaiser’s publication in its entirety – would be a percentage of the overall cost of healthcare. I will use 2 examples I personally know of from my own professional experience:

    A pharmaceutical company releases a new beta-blocker, a class of drug used in types of chronic heart disease. (So it is an “advancement” that is applied to the chronic population.) The problem is that this is a “me-too” drug. There are dozens of beta-blockers available on the market, many – most – in generic formulations, with every feature available. But this one might be different enough by virtue of molecular structure that it gains a patent and a “hypothesis” or speculation “for future research” of other benefits. The drug is approved by the FDA and released, marketed to the public (via mass marketing, just like McDonald’s hamburgers) and promoted to providers – and now patients are put on a product that cost, say $145/mo instead of $7.00 per month, or less. Don’t worry. There are a team of people that work with the insurance companies, institutions and government to get this drug on formulary. This is very common – a “me too” is brought to market because the market is so huge, that if they can get just a small piece of the pie, it means huge income to the company. And, if there is a patent on the drug, it is protected from generic competition for a certain amount of years. (I am not sure how the present law/regulation reads.)

    A new diagnostic exam is made available. Rather than have the hospitals in a metro area meet and decide the need based on per capita, each hospital purchases their own equipment to remain “competitive” (the manufacturers offer incentives.) But wait, there is more… Those freestanding surgery centers, clinics and diagnostic centers? They are buying them too! So we end up with a healthcare infrastructure that is supersaturated with equipment is doesn’t need, but was purchased so the health care entities could remain “competitive” against each other. Who foots the bill for that?

    Why do people in Canada wait for tests? They do not have the supersaturated infrastructure that the USA does. If I need an MRI, if I can’t get it done tomorrow at 2pm to fit my schedule at Hospital A, my doctor’s office will call 4 other places to find an appointment to fit my schedule. Machines are sitting unused all over town. For every diagnostic test imaginable. There are two major hospitals in my city, not counting the VA and the county hospital. The competition between the 2 main players has been fierce for the past 20 years and rather than work together to complement services, they keep trying to one up each other. And the past ten years have brought the independent surgery and diagnostic centers. In spite of the Stark laws, many of these are physician owned, and the physicians refer their patients to these facilities. Additional rules (legislation?) have been put in place but I am not sure if there is a measure of outcome. Stark laws are on the books but did not seem to stop the building boom.

    Where the benefit of the increase in spending would be beneficial: development of technology that would repair the damaged organs. And this is where the stem cell research is so vitally important. We would see a huge return on investment.
    And the issue of being responsible for one’s health has to start somewhere. Do you agree with that? As a nurse?

    I hope you do not mind the exchange of ideas. I have been out of school for 4 years now and I miss the discussions with other students, hearing what they have to say, and hearing their feedback on my thoughts.

    • No worries, I love response and discussion!
      I agree with you, there are many issues and problematic areas in our healthcare, and none have any easy fix.
      It is very complicated and complex because the U.S. healthcare is the world’s 5th largest economy! It is the same as if we decided to fix the economy of France = it is on par in spending with the U.S. healthcare.
      Strangely enough, once we realize that, we see the task of reforms and changes not so daunting or pointless because we are talking about the 5th largest system of economy in the world. Now we know it takes time, it will take many steps, years of reforms and policy implementations, ongoing changes in legislation, and we will take wrong steps and (hopefully) try to fix them, etc…

      I loved your examples, they are right on. I must admit the world of pharmacology industry is a complete enigma to me. Every time I try to get deeper and understand what they are doing I get slammed with another exemption, additional change of rules, very strong and active lobby and lots of money, spending money. But I am always told that drug research and development is one of the most financially draining endeavors, that before they come up with one FDA approved drug, they spend millions, upon millions and millions and a decade of financially losing situation. So on one hand I understand their need to recoup their investment money and get as much profit as they can.
      The tie to the providers – that’s another thing.
      I do have a problem physicians prescribing drugs and medication simply because they are “told” to do so. Now with the changed law, pharma reps cannot buy or otherwise entice providers into describing “their” drugs so perhaps in a few years we will see if this approach is working.

      The issue of over-prescribing medications is a symptom of much deeper problems in our society. It is complicated as patients go to physician offices armed with information and data from WebMD and other sites demanding procedures and instant-fix-me drugs and if they don’t get it, patients are very unhappy. I am NOT saying every physician is prescribing medications per patient’s request, I am simplifying a deeper problem in our society.
      Which leads me to your last point, where does personal responsibility for one’s health start? Why is it OK to fine hospitals for patients early hospital re-admissions for non-compliance or un-willingness to change their life style, stop smoking, improve their diet and start exercising without adding any personal responsibility for early hospital re-admission?
      One problem is that lower income Americans do not have money to buy medications and so they chose to go without which in turn increases their chances for early re-admission. One hospital here is working on a program of sending lower socio-economic patients home with a 30-day medications supply. Well, what happens on day 31 or 32? We don’t care anymore?
      No, we do, but it’s so the hospital will not get fined for re-admission within 30 days of hospital discharge in certain diagnoses – and I totally and completely understand it and if I were their policy advisor, I believe I would propose very similar plan. Those fines will be large, plus they will negatively impact the hospital reimbursement / ratings / standing.

      So what can we do for our patients in a long run…?!? Improve chronic disease and care management and remove barriers in accessing health care.

  4. I believe we are like minded in our strong interests in the “new” public health – it encompasses health care, health policy and law, global issues, emergency preparedness and response, epidemiology, etc. My journey into this area began many years ago, but prior to that I spent a good portion of my professional career in the pharma industry. I would be glad to provide you with information that might answer questions you have not been able to get answered. Since most people would not be interesting in such a narrow topic, we should probably take that conversation to email. What do you think?

    I did my Master’s internship in disaster response with the Department of Homeland Security. Very interesting. They are not a public health agency – yet the majority of disasters are considered “public health” in nature. I do believe the agencies are working together now. Isn’t that a wonderful thing. 🙂

    Yes, socioeconomic level, medications, and readmission to hospitals – a measure for $. I believe the hospitals had to agree to the terms, and the patients will be followed and contacted by someone, a nurse, to support their compliance after discharge. I am not quite sure. Maybe you know. A program through Medicare for Medicare patients? They do not use other patients, only the Medicare ones in their measures.

    It is almost time for my world to wake up. – I am always very delighted to find someone who is very passionate about the same issues. I work very hard to make a difference on policy and legislation, health care reform – so many issues… and I am surrounded people who do not care. They say “It is policy.” I say “So, let’s ask why, it doesn’t make sense.” And then it gets changed because no one can remember the rationale and it doesn’t make sense.
    So, this discussion, I love it!! I recharge my battery for another week!

  5. Maybe I was wrong not reviewing If U.S. health care spending is so outrageous, are we getting the … in its entirely but I still stand firm researching alternative methods for best health insurance for the money .

    • Researching, doing do diligence and being your own health advocate is the BEST thing any one of us can do not only for ourselves, but also for our loved ones and our families.
      So more power to you, don’t be intimidated by a white coat, ask questions, be prepared, have a list of questions from home, ask.
      Doctors, at least most what I have had the pleasure to meet and work with, are wonderful creature set on helping, fixing, improving, making better…. Perhaps in their own way they may not come across as such, but trust me, they are.
      They are extraordinary creatures.

      Thank you for reading my blog, thank you for your time and I apologize for this delay.
      It has been very unusual year for me, so it took me a bit to get re-organized and back on top of things.
      I promise, I will keep writing interesting if not different and unique pieces, I have a different angle from which I see many things, and if you’ll give me a chance, I promise I will no disappoint you.

      Also, just last week one evening I decided to start a new FB professional page titled “Marketa’s World VIVA Politics, Healthcare & Global Affairs. The link is at the top on my latest Ukraine article, plus it come right up when you put it in FB search. You will see me surrounded my kids (on the banner) in a rural village on a school yard at the foot of the Himalayas….

      Thank you again and I look forward to seeing you in my social media world.

  6. Where can I view more info on If U.S. health care spending is so outrageous, are we getting the …, specifically on best health insurance company ratings?

    • There are may sources today available to see the disparaging reality of U.S. healthcare system and delivery.
      What I would suggest, if you are still interested in learning more, is to join either a Coursera (free) seminar or now the new EXEd that is also offering interesting health systems seminars (also for free).
      Seminars and online courses at Stanford look at the use of technology – as without that our healthcare system will collapse, so that is always a good place to look.

      Hope I was able to give you little suggestions. I apologize for my late reply, yes, I am aware it has been many months.
      I have been in one circle and my new resolution is to take care of my expertise and brand through follow through in my social media world. It is a new process, ney, a new world for me, so I am learning.
      I started a new professional FB page last week titled “Marketa’s World VIVA Politics, Healthcare & Global Affairs”.
      Again, as I said, even thought I am an Administrator, I am learning all these new things being the ‘administrator’ of my own FB page and so I promise I will write and post only interesting and worthy articles and thoughts so I am not wasting your time.

      What I found is having considerable success, is my Last Thought of the Day segment – little sum up or a little short conclusion of one simple (or seemingly simple) aspect which I link to a daily activity.
      2 days ago it was on FEAR, yesterday about ‘BIGGER’
      It seems people do connect with this – and that is making me very happy!

      So please, do Czech-out my new FB page, continue to read my blog, and I thank you for your time!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s