American Health Care Is The Most Expensive In The World, With Less Utilization

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A recent study found that the average American spends much more on health care than other developed countries, not because Americans have more access to health care, but because it is more expensive.

The study, conducted by the Johns Hopkins Bloomberg School of Public Health, was published in the latest issue of Health Affairs and analyzed health care use and spending among industrialized nations in the Organization for Economic Cooperation and Development (OECD). The researchers concluded that the higher cost of health care in the United States was simply that American health care has higher prices, which includes pharmaceuticals, services, salaries for medical workers, and hospital fees.

Americans spent $9,892 per capita on health care in 2016, the highest average in the world, roughly two and a half times the median of developed nations. Switzerland ranked second at $7,919, and the OECD median was $4,033.

Despite that spending, Americans actually had less access to many health care resources. In 2015, there were 2.6 practicing physicians per 1,000 Americans, while the OECD median was 3.2 per 1,000 people. There were also 7.9 practicing nurses per 1,000 Americans, while the OECD median was 9.9. The United States offered 2.5 acute care hospital beds per 1,000 Americans, compared to the OECD median of 3.4.

The United States ranked second in the number of MRI machines per capita and third in the number of CT scanners per capita, but even the cost of those resources has proven inefficient. Japan ranked first in both categories, yet was among the lowest overall health care spenders among OECD nations in 2016.

“In spite of all the efforts in the U.S. to control health spending over the past 25 years, the story remains the same—the U.S. remains the most expensive because of the prices the U.S pays for health services,” says lead author Gerard F. Anderson, PhD, a professor in the Bloomberg School’s Department of Health Policy and Management.

“It’s not that we’re getting more; it’s that we’re paying much more,” Anderson says.

The future does not look any brighter for the United States, according to the analysis. The United States had 7.5 new medical school graduates per 100,000 Americans in 2015, far behind the OECD median of 12.1.

“There’s no doubt that administrative complexity and higher drug prices both matter – as do higher prices for pretty much everything in U.S. healthcare,” said Irene Papanicolas of the London School of Economics and the Harvard T.H. Chan School of Public Health in Boston, according to Reuters.

“These inefficiencies are likely the product of a number of factors including a reliance on fee-for-service reimbursement, the administrative complexity of the U.S. health care system and the lack of price transparency across the system.”