United States continues to spend significantly more
on health care than any country in the world. In
2005, Americans spent 53 percent per capita more
than the next highest country, Switzerland, and 140
percent above the median industrialized country,
according to new research from the Johns Hopkins
Bloomberg School of Public Health. The study authors
analyzed whether two possible reasons supply constraints
and malpractice litigation could explain the difference
in health care costs. They found that neither factor
accounted for a large portion of the U.S. spending
differential. The study is featured in the July/August
2005 issue of the journal Health Affairs.
"It is commonly believed that waiting lists
in other countries and malpractice litigation in
the United States are major reasons why the United
States spends so much more on health care than other
countries. We found that they only explain a small
part of the difference," said Gerard Anderson,
lead author of the study and a professor in the Bloomberg
School of Public Health's Department of Health Policy
The study authors reviewed health care spending
data on 30 countries from the organization for Economic
Cooperation and Development (OECD) for the year 2003.
U.S. citizens spent $5,267 per capita on health care.
The country with the next highest per capita expenditure,
$3,446 per capita. The median OECD country spent
$2,193 per capita.
One of the commonly cited reasons why U.S. citizens
spend more on health care than other countries is
that these other countries have waiting lists, especially
for elective surgery.The procedures with waiting
lists in these other countries, however, represent
only 3 percent of spending and therefore cannot explain
much of the cost differential.
Another perceived cause of higher health care costs
in the United States is that malpractice suits increase
the prices charged by doctors and cause them to practice
defensive medicine, which occurs when doctors order
extra tests or procedures to reduce their risk of
being sued. The researchers compared the number of
malpractice claims and awards in the United States,
Canada, Australia and the United Kingdom and found
that while U.S. citizens sue more often, the actual
settlements from all four countries were comparable.
According to the study authors, defensive medicine
probably contributes more to higher health spending
than malpractice premiums, but determining which
tests and second opinions should be defined as defensive
medicine is less clear. The highest estimate for
costs of defensive medicine in the United States
is only 9 percent and many experts believe this number
is too high.
"We can't blame the United States' higher health
care costs on limiting procedures in other countries
or the elevated number of law suits filed in the
United States," said Peter S. Hussey, PhD, co
author of the study and a recent graduate of the
Bloomberg School of Public Health's Department of
Health Policy and Management.
in previous years, it comes back to the fact that
we are paying much higher prices for health care
goods and services in the United States.
Paying more is okay if our outcomes were better
than other countries. But we are paying more for
comparable outcomes," said Anderson, who is
also the director of the Johns Hopkins Center for
Hospital Finance and Management.
In 2004, Anderson and Hussey also co authored, along
with Uwe E. Reinhardt, PhD, of Princeton University,
a similar comparison for Heath Affairs. It was the
most viewed study in the journal's end of year review.
"Health Spending in the United States and the
Rest of the Industrialized World" was supported
by a grant from the Commonwealth Fund.
Additional authors of the study were Bianca K. Frogner
and Hugh R. Waters.
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