U.S. outpaces industrialized nations on health costs, not quality

Report: Failure to manage chronic conditions contributes to U.S. health costs

Topics: Market Trends, Strategy

May 4, 2012

The United States spends more on health care than 12 other industrialized countries, but the higher spending does not equate to better-quality care, according to a new report from the Commonwealth Fund.

The report—which updates previous Commonwealth Fund spending analyses—uses data from the Organization for Economic Cooperation and Development and compares U.S. health expenditures to those in Australia, Canada, Denmark, France, Germany, Japan, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom.

It found that the United States in 2009 spent nearly $8,000 per person on health care, while Norway and Switzerland spent about two-thirds of that amount and Japan and New Zealand spent roughly a third. In addition, researchers found that health care spending accounted for 17% of the U.S.'s gross domestic product, while the other nations' health care spending did not exceed 12% of their GDP.

The report noted that two common reasons for high health care spending—more physician visits and lengthy hospital stays—were not among the culprits for the higher spending. Instead, it cited high prices for medications and medical services, use of expensive technologies, a high obesity rate, and a potential tendency to overuse costly procedures for the high health care spending.

Failure to manage chronic conditions contributes to high U.S. costs

David Squires—a senior research associate at the Commonwealth Fund and the report's primary author—also notes that although the United States has the highest survival rates for breast and colorectal cancers, mortality rates for asthma and diabetes-related amputations pale in comparison to the other countries.

Squires says the data demonstrate the United States' "failure to effectively manage these chronic conditions that make up an increasing share of the disease burden." He adds, "The findings make clear that despite high costs, quality in the U.S. health care system is variable and not notably superior to the far less expensive systems in the other study countries" (Smith, Politico, 5/3; Zigmond, Modern Healthcare, 5/3 [subscription required; Sanger-Katz, National Journal, 5/3).

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