Dive Brief:
- Despite efforts to control healthcare costs, the U.S. still spends about twice as much as other high-income countries on medical care, according to a new study published in JAMA Tuesday.
- Even though healthcare utilization rates between the U.S. and the other nations studied were roughly similar, spending on medical care accounted for a larger share of GDP than each of the 10 comparator countries.
- Administrative costs — which accounted for 8% of costs in the U.S. versus 1% to 3% in others — as well as pharmaceutical costs seemed to be the major factors accounting for the U.S.'s higher spending, the study concluded.
Dive Insight:
The study compared potential spending drivers, including capacity and utilization, in the U.S. and 10 high-income countries (the United Kingdom, Canada, Germany, Australia, Japan, Sweden, France, the Netherlands, Switzerland and Denmark).
Looking at data from between 2013 and 2016, researchers estimated nearly 18% of the U.S. gross domestic product was spent on healthcare. The other countries ranged from 9.6% (Australia) to 12.4% (Switzerland) of GDP.
One positive — the U.S. ranked second lowest for smokers — was offset by higher shares of adults who were either overweight or obese, lower life expectancy and higher infant mortality.
The American numbers for physician and nursing workforce and number of hospital beds were similar to the other nations.
Though utilization in many areas mirrored other nations, administrative costs in the U.S. system dwarfed other countries. These costs, which include planning, regulating and managing health systems and services, accounted for 8% of costs in the U.S. compared to between 1% and 3% in the other countries.
The U.S. also spends significantly more on pharmaceutical costs. The U.S. spending on drugs per capita clocked in at $1,443 compared to between $466 and $939 for the others.
Salaries for physicians and nurses were also higher in the U.S. Generalist physician salaries were $218,173 in the U.S., compared to a range of $86,607 to $154,126 in other countries.
The report helps show the degree to which the U.S. is an outlier in spending on medical care. U.S. healthcare spending is projected to rise another 5.5% annually on average between 2017 and 2026, the Office of the Actuary at Centers for Medicare and Medicaid Services recently reported. The data, published in Health Affairs, forecast healthcare will represent almost 20% of the economy by 2026, up from 17.9% in 2016.
Another recent JAMA report explored how administrative costs like billing and insurance processes are fueling healthcare costs. The report found billing costs represented 14.5% of professional revenue for primary care visits, 25.2% for emergency department visits and 8% for general medicine inpatient stays.
That finding could be of interest to the Trump administration, which has made an effort to roll back regulatory burdens and withdraw regulatory actions.