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.