Improving US Healthcare
Lower Costs & Better Outcomes
Among industrialized nations, the United States ranks first in the cost of healthcare per capita and 30th in life expectancy. In this column, we will explore ways to improve the U.S. healthcare system, while lowering healthcare costs and improving the outcomes.
The analysis here utilizes information from the Organization for Economic Co-operation & Development (OECD), an organization of 39 industrialized countries, including the U.S., Canada, Chili, Mexico, Israel, Japan, South Korea, Australia, New Zealand, and 30 European countries. Most of these countries have found ways to lower healthcare costs and increase life expectancy. Here is a sample of information from the OECD Health Statistics 2016:
Cost per Life
Capita Expectancy
Italy 3,207 82.2
United Kingdom 3,971 81.4
Japan 4,152 83.7
Australia 4,177 82.4
France 4,367 82.8
Canada 4,506 82.1
Sweden 5,003 82.3
Germany 5,119 81.2
Netherlands 5,131 81.8
Switzerland 6,787 82.3
United States 9,024 78.1
OECD Average 3,620 80.5
Note that the United States spends 2½ times per capita as much on healthcare as the average OECD and the lifespan of Americans is more than two years shorter than the OECD average.
Additional evidence supports these statistics. A 2012 Novartis/McKinsey study revealed that the French population has a higher rate of lung disease than Americans due to higher smoking rates. Yet the French spend one-eighth as much on treating lung disease and have fatality rates one-third of the U.S. fatality rates. Broader coverage and early detection contribute to better outcomes.
In their 2017 study of 11 leading nations, the Commonwealth Fund stated, “Overall, the United States ranks last on access. The U.S. has the poorest performance of all countries on the affordability subdomain and ranks next to last in Administrative Efficiency”.
In many OECD countries, the private sector delivers the healthcare services and the government pays for the healthcare through taxes. All citizens are covered and governments administer the programs for far less cost than the private sector insurance in the U.S.
Studies have shown that, on a per claim basis, Medicare’s administrative costs are about one-fourth the cost of private insurance. The insurance industry argues that on a “per enrollee basis” (not per claim), their administrative costs are less, but this is because they insure a younger group and many enrollees have few or no claims. As Disraeli said, “Figures don’t lie, but liars figure.”
In an apples-to-apples comparison, the Congressional Budget Office (CBO) compared the administrative costs of regular Medicare to the privately-run Medicare Advantage. Medicare’s administrative costs are one-fifth the cost of Medicare Advantage. The higher cost of private insurance is due to expenses for sales, advertising, other marketing costs and higher salaries and bonuses for executives.
Adding more citizens to Medicare would require an increase in taxes, but this increase would more than offset what employers and individuals are paying for healthcare insurance. According the Council on Foreign Relations, healthcare costs add $1,500 to $2,000 to the cost of every car made in America. Reducing healthcare costs for employers would enable American companies to be more competitive in global markets.
In addition, various polls and studies (including Gallop Poll and Princeton) have shown that people on Medicare are more satisfied with their health plan that people with private insurance and they have less negative experiences.
Based on this information, adding more Americans to Medicare would:
- Lower overall healthcare costs
- Increased life expectancy
- Cover more Americans
- Make American companies more cost competitive.
This could be accomplished in a phased-in approach, by adding citizens 60-65 the first year, then adding those over 55 in two years, continuing until all Americans are covered with Medicare.
The biggest challenge to single-payer system may be the lobbying against it. Healthcare lobbyists represent their employers, including health insurance companies. In 2016, the healthcare industry spent $511 million on lobbying, according to the Senate Office of Public Records. Healthcare ranks #1 in lobbying expenditures. Spending on healthcare lobbying in 2016 amounted to $955,000 per member of Congress. In Washington, DC, there are 2,759 registered healthcare lobbyists, more than five lobbyists for each of the 535 Members of Congress.
Some countries, like France and Japan, have systems that blend single payer with insurance. Germany has non-profit insurance companies. The Dutch have a system similar to the U.S. in that they utilize private health insurance, yet their healthcare costs per capita are 45% less than the U.S. In the Netherlands, all residents, excluding the military, are mandated to purchase health insurance and have the right to change insurers every year. Insurers are required to accept all applicants. The Government subsidizes those who are high-risk or low-income. Long-term care insurance is also mandatory and subsidized. More information on the Dutch healthcare system is available on the Commonwealth Fund web site.
Other industrialized nations have proved that they can provide high-quality healthcare at lower costs. The challenge for Americans is to replace false beliefs with evidence-based research and foster a healthcare system with lower costs, more inclusion and greater life expectancy.
tadalafil goodrx where to get tadalafil