Healthcare: Talking Points & Numbers

Healthcare: Talking Points & Numbers

I’m going to be throwing a lot of numbers around over the next few posts. I intend to source them with US government numbers or as independent, non-partisan sources as I have found.

First, why is healthcare so expensive in the U.S.? Most of my information will be coming from a 2007 McKinsey report on Healthcare costs in the US. To download the PDFs from McKinsey, registration is required. There are two PDFs; a synthesis report that is fairly brief and a longer, more detailed report. Both are worth viewing and downloading.

Main points of this reporting worth considering (these are taken from the shorter PDF linked on the McKinsey page as “Synthesis”):

  • The United States spends more of its wealth on health care than any other developed country.
  • The amount is 16% of GDP. This expenditure on health care is more than the U.S. spends on food. This bears repeating. The United States spends more on health care than it does on food.
  • The U.S. spends $1,645 MORE per person than 13 other Organisation for Economic Co-operation and Development (OECD) countries. (more here, you’ll have to click into “Health” as the site is done using frames and linking to the specific page is difficult)
  • The U.S. health care system is intrinsically more expensive in the following areas: hospital care, drugs, outpatient care, administration, insurance and public investment in health.
  • The U.S. consumes LESS drugs than Canada, Germany and the UK.
  • U.S. drug costs are 50-70% higher than peer countries.
  • U.S. physician compensation is 6.6 times GDP per capita for specialists and 4.2 times GDP per capita for generalists compared to 4 times GDP per capita for specialists and 3.2 times GDP per capita for generalists in peer countries.
  • U.S. physicians see, on average 1.6 times more patients than their counterparts in peer countries.
  • In 2003, the U.S. spent $412 per capita on health care administrative costs—nearly six times that of other OECD countries.

The U.S. is expensive. These are just top-level points. The complete McKinsey report is well worth reading as all of these points are examined in a depth that I cannot do here. I did not touch physician owned facilities where expensive procedures (scans, outpatient care, et al) are performed. I also have not talked about expensive technology and how it is utilized and/or self-referred from physicians who also have a stake in said facility.

Many people are calling into question the number of uninsured in the United States. This chart:
from: U.S. Census information about uninsured as of 2007. It’s a PDF.

Whether or not you count illegal immigrants in those numbers or not, the number of uninsured in the United States is far too high and is a travesty. It is nothing short of a massive market failure to provide a service to the general populace. It’s a damning blow to privatization of for-profit healthcare.

Finally, the U.S. spends a great deal of money on health care, surely this would mean the U.S. has a better quality of health care service, care and delivery. However, the U.S. ranks lowest on overall life expectancy compared to England, Germany, France, Italy, Holland, Denmark, Sweden and Japan.

See also: WHO rankings and Study on Healthcare Quality.

Your thoughts?