How U.S. health care
stacks up internationally

by Phineas Baxandall

Dollars and Sense magazine, May / June 2001

How U.S. health care stacks up internationally
by Phineas Baxandall
Dollars and Sense magazine, May / June 2001

Overall, the United States spends about 50% more per capita on health care than any other country. The private sector accounts for about 56% of total health spending in the United States, compared to an average of 25% in other industrialized countries. At the same time, public health spending per capita is higher in the United States than in any other wealthy capitalist country except Switzerland, Luxembourg, and Germany. You would think that with our unrivaled levels of spending, Americans would be the healthiest people on earth. But our health-care system is abysmally inefficient when it comes to delivering health.

A pathbreaking new report from the World Health Organization (WHO) studies and ranks how 191 countries, from Afghanistan to Zimbabwe, provide health care. Researchers compared each country's achievements to the resources available in that country. They then ranked this performance against that of other countries. The WHO based its assessments on five categories: overall population health, health inequalities, health system responsiveness (based on patient satisfaction, waiting periods, etc.), distribution of responsiveness (how well the system serves people of differing economic status), and distribution of costs.

The WHO gives the United States high marks for its world-class doctor training and advanced medical technology. And the United States tops the list in "responsiveness" for virtues like confidentiality, brief waiting periods, and patient decision-making autonomy. But overall, the United States ranks 37th in national performance, behind not only most European nations and Japan, but also Chile, Colombia, Saudi Arabia, and Singapore.

American health-care performance is weighed down by its shabby provision for the 16% of citizens who are not insured. According to the Henry J. Kaiser Family Foundation, uninsured people are more likely to miss recommended medical tests and treatments. Uninsured children are 30% less likely to receive treatment after an injury. And death rates for uninsured women with breast cancer are 40-60% higher than for insured women, after adjusting for age, income, and race.

Even for those with insurance, the U.S. system does worse in many ways than other countries'. While few U.S. doctors make house calls, such visits are both common and inexpensive in Italy, France, and Germany. "Patients in countries like France and Germany have more doctors' visits, specialist care and hospital time than their counterparts elsewhere," the Wall Street Journal admits. "Permission isn't needed to see a specialist or get a second opinion, and week-long trips to the spa are not uncommon treatment in Germany." Not so under the United States' "managed care" system.

Profit drives the U.S. system, and what is most profitable for hospitals, insurance companies, or drug companies is not most effective at producing good health. Much of the United States' "health-care spending" goes to company profits, multi-million dollar CEO salaries, and marketing. The health industry focuses on people with the greatest ability to pay rather than the greatest need for care. Private healthcare spending therefore goes disproportionately toward expensive eleventh-hour measures unlikely to extend life for very long and to pricey lifestyle drugs such as Rogaine. Lack of access to basic care, in turn, makes for costly system-wide inefficiencies. When poor women cannot get basic prenatal care, for example, they and their newborns are more likely to suffer complications requiring round-the-clock intensive care. When uninsured people are unable to see a general practitioner, they often must rely on expensive emergency room care.

How do higher-ranked health-care systems work? There is no single answer. The systems of countries #1 (France) to #36 (Costa Rica) differ on how the costs are split up, how physicians are paid, who owns the hospitals, what is the role of primary-care doctors, and who pays for pharmaceuticals, among other features. The systems, however, fall into three broad categories. First, there are universal multi-payer systems in countries like Germany and France. While these countries have multiple "sickness insurance funds," their health systems differ greatly from the United States' private-insurance system. The insurance funds in France and Germany are funded by taxes rather than insurance premiums and are tightly regulated by their governments. Then there are single-payer systems such as in Canada and Sweden. In these countries, the government offers a single insurance system that provides coverage to all citizens. Finally, there are countries, such as Great Britain and Spain, which have national health services. Unlike the others, these are not insurance systems at all. Instead, the government owns hospitals and employs health-care providers directly. Even under single payer or national-health systems, private insurance companies may offer supplemental coverage.

For all their differences, other countries publicly regulate the provision of health care more closely than the United States. Defenders of the U.S. system often decry these alternatives as forms of "rationing" and "bureaucracy." The United States, however, already has plenty of both, courtesy of the private, profit driven system. Every HMO or managed-care arrangement in the United States rations care - permitting a patient to see a specialist only if referred by a primary-care physician, refusing to cover certain treatments altogether - while the system as a whole rations care according to ability to pay. And even the Wall Street Journal admits that the U.S. system "has accumulated a massive bureaucracy that simply doesn't exist in other countries." Perhaps one fourth of so-called "health care" workers "do nothing but paperwork."

It should not come as any surprise that, for our unmatched levels of spending, the United States gets less than it pays for. What the U.S. system has - inefficiency, red tape, and big profits - is expensive. What it lacks - universal coverage- is priceless.

Phineas Baxandall is a member of the D&S collective.

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