On a global scale, the United States is an outlier when it comes to healthcare costs. We invest 17% of the entire economy on medical services, more than twice the average of high-income nations around the world. In 2019, the U.S. ranked the highest in healthcare expenditures per person among developed countries.
The trillions of dollars invested in American public health is predicted to increase as the population ages and more extravagant technologies are implemented:
Overall healthcare costs — including all private and public spending — are anticipated to rise by an average of 5.5 percent per year over the next decade — growing from $3.5 trillion in 2017 to $6 trillion by 2027.
The rise in healthcare spending is partially due to the higher costs of medical services in America compared to similar socio-economic countries. Naturally, as a nation become wealthier, they implement more specialized treatments, intensive diagnostics, over-priced therapies, and costly surgeries. But many Americans are struggling to keep up with the steep price tag of receiving help.
The Peterson-Kaiser Health System Tracker notes that the [U.S.] has shorter hospital stays, fewer angioplasty surgeries, and more knee replacements than comparable countries, yet the prices for each exceed those elsewhere.
In 2014, the average price for a knee or hip replacement, coronary bypass surgery, caesarean section, or an MRI was significantly higher for Americans. An appendectomy in the U.S. ($15,930) is four times the average cost in Australia ($3,814) and a 30 day supply of Xarelto, a drug used to treat blood clots, in the U.S. ($292) is almost three times the average cost in the United Kingdom ($102). The limited selection of hospitals and pharmaceutical companies keep the competition low and the price tag high. The U.S. also doesn't set boundaries to the cost of new treatments or drugs. Not only is hospitalization over-priced, but there's more pressure and dependence on using some of the most expensive technologies, such as MRIs and hip replacements. If higher priced medicine and upscale technologies are integrated, the quality of treatment and outcomes should reflect the investment...Right? But they don't.
Although the U.S. spends twice as much on medicine as other high-income countries, we aren’t an outlier when it comes to performance. The U.S. underperforms in quality of medical services provided and the health outcomes aren’t significantly better than the rest of the world (check out my last blog post for more). Compared to the average of OECD countries, the U.S. has twice the rate of obesity, the lowest life expectancy, and the highest burden from chronic diseases. An explanation? Wasted capital on unproductive resources:
Health policy experts point to excessive waste in our healthcare system as the culprit behind our high costs. The Health and Medicine Division of the National Academies of Science, for example, has estimated that about 30 percent of total healthcare spending goes to unnecessary, ineffective, overpriced, and wasteful services.
In the U.S., around 21% of patients proceed with unnecessary CT or MRI scans for small headaches and 26% of patients are over-prescribed antibiotics for minor sinus infections. Healthcare services, such as pharmaceutics, inpatient, outpatient, and administrative care, that have little or no benefit to patients accumulate to more than $10 billion in wasted spending. That's $10 billion down the drain. Some solutions to avoid unnecessary spending would be to replace expensive technologies with low-cost, minimally invasive services, reduce the tendency to over-prescribe medications, and dedicate a greater percentage of capita on preventative measures.
Another primary factor to the high cost, low quality outcomes of American medicine is the inefficiency in administration and use of informational technology. Unlike other countries that have standardized packages, we waste a significant amount of time on processing benefit claims, handling complex operations, and coordinating diverse insurance plans that each cover different treatments. Research has shown that
the United States spends about $940 per person on administrative costs — four times more than the average of other wealthy countries and significantly more than we spend on preventive or long-term healthcare.
The higher healthcare costs reflects the focus on administrative-centered, expensive treatment plans and the diminished attention on low-cost, patient-centered care. Whenever I go to the hospital, my physician spends most of our short, 15 minute session inputting my medical information into the computer rather than engaging face-to-face with me. And it's not their fault. They’re burdened with the task of filing medical records into the hospital's electronic system, sometimes spending hours inputting data after their rounds. This not only makes the experience impersonal, but it also contributes to the increasing burnout and stress of practitioners. The current administration and structure is not only stifling patients but also hurting healthcare workers.
More than ever, there’s growing public dissatisfaction with the current medical system, challenging America to reconsider the current flow of national healthcare spending and its inefficiency. Although Integrative Medicine can’t solve every problem, it does provide tangible and efficient solutions. This specialized care encompasses all physical, social, mental, environmental factors that affect wellbeing and promotes long term goals. Patients are provided affordable resources that allow them to take preventative measures, bypass excessive medication, and receive expensive treatments only under the most critical conditions.
Although the goal may seem insurmountable, it's definitely feasible. There’s time to reform the current costly and wasteful medical system. The U.S. can pay close attention to other nations that have some of the best healthcare qualities and outcomes. The government can redirect the $10 billion wasted on unnecessary services by carefully budgeting prices, developing key policy changes, and focusing on chronic disease management and prevention. We can learn from our peer countries, such as Japan and Switzerland, in increasing access to reasonably priced, high quality primary care for everyone. It's not too late for America to change its current trajectory and develop the most affordable, efficient, and high quality healthcare in the world.
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