Americans spend more on health care, but have shorter lives

Posted at 8:30 AM, Mar 16, 2018

Americans spend nearly twice as much on health care as other wealthy countries, but it’s not doing much to improve their health, a new study finds. The United States has the shortest life expectancy and highest infant and maternal mortality rates among any of its peers.

Steep spending on drugs and doctor’s salaries are among the major drivers of the high cost of health care in the United States, according to researchers at Harvard T.H. Chan School of Public Health, Harvard Global Health Institute and the London School of Economics. But, contrary to popular belief, Americans don’t use more health care than residents in other countries.

Health care spending accounted for 17.8% of the US economy in 2016, compared to an average of 11.5% in the 11 high-income countries the study examined. Americans spent $9,400 per capita on health care that year, compared to an average of $5,400 in the peer nations, which include Canada, Japan, Australia and several Western European countries.

However, health care usage in the United States was relatively similar to the other countries. Americans had lower rates of physician visits and spent fewer days in the hospital, though they had some of the highest rates for imaging tests, such as MRIs and CT scans, and some common surgical procedures, such as knee replacements, cataract surgeries and cesarean births.

Where the United States topped the charts was in prices and salaries. Per capita spending on prescription drugs was more than $1,400, compared to an average of $750 for all nations studied. For several commonly used medications, the American price was more than double what it was in the country with the next highest cost.

The average salary for a general practice physician in the United States was more than $218,000, compared to an average of nearly $134,000 in the peer nations. Specialists were paid $316,000, compared to nearly $183,000, while nurses earned more than $74,000, compared to just under $52,000.

The American health care system also spends far more on administrative costs — coming in at 8% of total health care spending, compared to between 1% and 3% for other countries.

All this spending hasn’t translated into better health for Americans. The average life expectancy in the United States is 78.8 years, compared to an average of 81.7 years for the peer nations studied.

Some states, such as Hawaii, Minnesota and Connecticut, have life expectancy rates of roughly 81 years, which is more comparable to other wealthy countries. But in Mississippi, Alabama and West Virginia, residents can only expect to live 75 years, on average.

The United States also has the highest infant mortality rate, with nearly six deaths out of 1,000 live births, compared to an average of 3.6 deaths elsewhere. The same is true of the maternal mortality rate, with more than 26 out of 100,000 women dying from birth- or pregnancy-related complications, compared to an average rate of 8.4 women in other nations.

Social factors are one of the main reasons why Americans don’t live as long as their peers in other wealthy countries, said Ashish Jha, professor of global health at Harvard Chan School. The United States has a higher poverty rate, as well as a higher share of uninsured residents. And it does not provide the same level of social services — such as food and housing assistance — as its peers.

“We have a lot more poor people, and we do a lot less for poor people,” Jha said. “We don’t make the same kind of investments.”

The study’s authors hope their findings will help guide policy makers in their quest to lower health care costs. Curtailing spending was one of the Affordable Care Act’s goals, and the Trump administration has also said it wants to reduce costs, particularly the price of prescription drugs.

In addition, the private sector is looking to curb health care outlays — with one of the latest examples being Amazon, Berkshire Hathaway and JPMorgan Chase’s initiative to lower the cost of health insurance for themselves and their employees.

“As the US continues to struggle with high health care spending, it is critical we make progress on curtailing these costs,” said Irene Papanicolas, a visiting assistant professor at Harvard Chan School and one of the study’s authors.