Does the United States Have the Best Health-Care System in the World?


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Hagop Kantarjian, MD

Fig. 1: Overall Ranking of 11 Developed Nations in Various Health-Care Parameters. Reprinted from Davis K, et al,13 with permission from The Commonwealth Fund.

The Affordable Care Act is far from being ideal, but it is a good start, and there are many opportunities for improvement. As more Americans get access to insurance at affordable prices, the results for the U.S. health-care system will improve in lockstep.

—Hagop Kantarjian, MD

Many concerns were raised and dire speculations predicted during the further implementation of the Affordable Care Act this year. So far, the trickling news is good: An estimated total of 20 million people gained coverage under the new law as of May 1,1 about 6 million enrolled in the law’s Medicaid expansion, 7.8 million young adults (aged 19–25) gained insurance under their parents’ coverage, the rate of uninsured fell from 18% to close to 13%,2 more people (39%) felt they benefited from the Affordable Care Act than were negatively affected (29%), and 46% of people switched to plans with lower premiums (39% paid more but often for much better coverage).3 Moreover, the law is already improving lives. Adolescents and young adults who had care through their parents’ insurance were reported to be doing better.4

That said, some problems were noted. The choices of providers were narrower,5 there were “hidden cliffs” (referring to people who earn slightly more than four times the federal poverty level—$46,000 for an individual, $95,000 for a family of four—and who could not receive tax credit subsidies to reduce insurance premiums),6 insurers exerted pressures to restrict care and pharmacy outlets attempted to restrict drug choices, and insurers raised out-of-pocket expenses on particular drugs (eg, antiretroviral drugs for HIV infection) to discourage vulnerable groups (patients with preexisting conditions) from applying to a particular insurance program.7 These can be remedied with additional legislation.

Mostly Good News

Thus, so far, most of the Affordable Care Act news is good, and the scary scenarios painted by some experts never happened: low enrollment and “death spiral” of the Affordable Care Act, high loss rates of existing coverage, insurance rate shocks, soaring health-care costs, younger people not signing up, people not paying premiums.8

Why is there then still resistance to and bad press about the Affordable Care Act, and even calls to repeal it if Republicans win a majority in the two houses of Congress? Perhaps it is because some Americans still believe that before the Affordable Care Act, we had “the best health-care system in the world.” This mantra is repeated so often that it is held by many as an unshakable truth. Repetition transforms belief into reality: We believe what we say, which becomes truer by repetition.

The belief that our health care is the best is hyped by some media that offer proof with anecdotes of presidents, foreign dignitaries, and wealthy individuals who seek health care in the United States, and of Canadians who wait longer for procedures than Americans. Prominent figures like Republican House Speaker John Boehner add strength to the argument by stating that the Affordable Care Act “is going to destroy the best health-care delivery system in the world.”

Sadly, almost all objective analyses suggest otherwise. The U.S. health-care system often ranks very low by multiple quantifiable measures.9-12 The most recent Commonwealth Fund 2014 Update ranked U.S. health care last among 11 developed nations by several objective parameters: low patient satisfaction, high rate of medical errors, worse infant mortality, shorter life expectancy, and poor efficiency (see Fig. 1).13

Troubling Findings

Critics argue that while the results are bad for the average American, for those with health insurance, the United States is still the best place to receive care. They highlight the data where survival rates for some cancers (cervix, breast, gastrointestinal) are better in the United States than in other developed nations.14

For example, one study showed that patients with cancer live an average of 11.1 years after diagnosis in the United States, but only 9.3 years after diagnosis in Europe.15 However, this may not be because we have better treatments, but because we do more screening procedures (mammograms, colonoscopies, Pap smears) and diagnose more cancers earlier.16 When annual mortality rates are considered (a better measure of treatment efficacy than survival rates), the U.S. results are not better.17

Moreover, some of the findings regarding U.S. health care are quite troubling.11 For example, 37% of Americans do not seek medical help when they become sick, or fail to fill prescriptions due to high cost (vs only 4%–6% in Britain and Sweden). About 23% of Americans have problems paying bills (vs only 6% or less in Britain and Sweden).

Three-quarters of Americans believe our health-care system should undergo major changes; on the other hand, 50% to 73% of Europeans are happy with their systems. And Americans wait longer than most Europeans to see a doctor, but we do beat the Canadians by a narrow margin.

High Spending

These poor results startle many, because the United States already spends more on health care than any other nation: 18% of the gross domestic product, close to $8,500 per capita. The two closest high-spending countries were Norway and Switzerland at about $5,500 each. Most other nations spend between $3,000 and $5,000 per capita.13

If we pay so much for health care in the United States, why do we get so little in return, and where does the money go? It is important to bear in mind that health care in most advanced nations is not for profit, and is a moral if not legal right of citizens. In the United States, health care is considered a “privilege” by some and an “entitlement” by others. It is provided for profit and, indeed, is a very profitable industry. For example, return on investment of drug companies has increased from 10% in the 1970s to 19% in 2010.

While we spent about $2.8 trillion on health care in 2012 (actually $8,900 per capita).18 less than $1 trillion was spent on direct patient care. Most of the dollars dissipate in the form of excessive profits to health-care businesses, including hospitals, drug and medical device companies, and insurance companies.

Hundreds of millions of dollars are also spent on overburdened bureaucracies and wasteful practices aimed at maximizing profits, without any evident benefit in relation to quality or quantity of patient care. For example, about 30% of health-care dollars are for administrative costs (vs less than 10%–15% in other countries).19 In one typical 900-bed hospital in the United States, about 400 employees handle insurance and billing paperwork compared with fewer than a dozen in a comparable Canadian hospital.20

We pay two to three times more for patented drugs in the United States compared with Canada or Europe. An extreme example is the hepatitis C treatment sofosbuvir (Sovaldi), which costs $80,000 to $160,000 for a 3- to 6-month treatment in the United States, but only $900 in Egypt. The average cost for a hip replacement is $80,000 in the United States, but less than $14,000 in Europe.21 An MRI costs, on average, $1,145 in the United States, and only $138 in Switzerland. Giving birth? Hospital costs can run to $10,000 in the United States, compared with $2,200 in Spain.22

Even within the United States, the prices show an incomprehensible wide range of variations. A colonoscopy in New York cost $740 in one area and $8,500 in another. The cost of treating an ankle sprain in an emergency room ranged from $100 to $24,000.23

Opportunities for Improvement

Can we improve things? We already are, through the implementation of the Affordable Care Act. Our results were poor because we marginalized 50 million Americans who did not have insurance, while another 50 million believed they had good insurance, which in fact offered little if any protection when faced with major medical illnesses.

The Affordable Care Act is far from being ideal, but it is a good start, and there are many opportunities for improvement. As more Americans get access to insurance at affordable prices, the results for the U.S. health-care system will improve in lockstep.

The expansion of Medicaid could also save an estimated 90,000 lives every year.24 Unfortunately, for obscure and incomprehensible reasons, 24 states still refuse to implement the Medicaid expansion of the Affordable Care Act,25 which could harm millions and potentially cause the loss of an estimated 19,000 lives a year.24,26 Studies analyzing data from the Affordable Care Act implementation and from the similar Massachusetts universal health-care program are already showing better outcomes.27

Will the Affordable Care Act or a more universal health-care system increase costs? Not necessarily. By reducing bureaucracy and administrative expenses, eliminating waste, suppressing fraud, negotiating better prices for hospital care, procedures, drugs and devices, and curbing current excessive profits, we will be able to deliver better and more health care to all Americans at affordable individual prices, and with lower spending per capita.

If this was possible in most advanced countries, why not in the United States? ■

Disclosure: Dr. Kantarjian reported no potential conflicts of interest.

References

1. Blumenthal D: Collins S: Health care coverage under the Affordable Care Act—a progress report. N Engl J Med. July 2, 2014 (early release online).

2. Ander S, Newport F: After exchanges close, 5% of Americans are newly insured. Gallup, June 23, 2014. Available at www.gallup.com. Accessed July 11, 2014.

3. Hamel L, Rao M, Levitt L, et al: Survey of non-group health insurance enrollees. Kaiser Family Foundation, June 19, 2014. Available at kff.org. Accessed July 11, 2014.

4. Chua, KP, Sommers BD: Changes in health and medical spending among young adults under health reform. JAMA 311:2437-2439, 2014.

5. Brill S: Hate Obama, love Obamacare. Time 3:18, 2014.

6. Brill S: The hidden cliffs in Obamacare. Time 22:18-19, 2014.

7. Novack S: Is Obamacare living up to its preexisting-conditions promise? National Journal, June 23, 2014. Available at www.nationaljournal.com. Accessed July 11, 2014.

8. Krugman P: The conscience of a liberal: Zero for six. New York Times, June 26, 2014. Available at krugman.blogs.nytimes.com. Accessed July 11, 2014.

9. Social Progress Imperative: The Social Progress Index 2014. Available at www.socialprogressimperative.org. Accessed July 11, 2014.

10. Institute of Medicine: U.S. health in international perspective: Shorter lives, poorer health. Report brief, January 2013. Available at www.iom.edu. Accessed July 11, 2014.

11. Commonwealth Fund: U.S. ranks last among seven countries on health system performance based on measures of quality, efficiency, access, equity, and healthy lives. News release, June 23, 2010. Available at www.commonwealthfund.org. Accessed July 11, 2014.

12. Nolte E, McKee M: Variations in amenable mortality—trends in 16 high-income nations. Health Policy 103:47-52, 2011.

13. Davis K, Stremikis K, Squires D, et al: Mirror, mirror on the wall, 2014 update: How the U.S. health care system compares internationally. Commonwealth Fund, June 16, 2014. Available at www.commonwealthfund.org. Accessed July 11, 2014.

14. Hussey PS, Anderson GF, Osborn R, et al: How does the quality of care compare in five countries? Health Aff (Millwood) 23:89-99, 2004.

15. Philipson T, Eber M, Lakdawalla D, et al: An analysis of whether higher health care spending in the United States versus Europe is ‘worth it’ in the case of cancer. Health Aff (Millwood) 31:667-675, 2012.

16. Klein E: Is America better at treating cancer than Europe? Vox, June 24, 2014. Available at www.vox.com. Accessed July 11, 2014.

17. Carroll A: Survival rates are not the same as mortality rates. Incidental Economist, August 31, 2010. Available at theincidentaleconomist.com. Accessed July 11, 2014.

18. Centers for Medicare & Medicaid Services: National Health Expenditures 2012 Highlights. Available at www.cms.gov. 2012. Accessed July 11, 2014.

19. Woolhandler S, Campbell T, Himmelstein D: Cost of health care administration in the United States and Canada. N Engl J Med 349:768-775, 2003.

20. Solman P: Why does health care cost so much in America? Ask Harvard’s David Cutler. PBS Newshour, November 19, 2013. Available at www.pbs.org. Accessed July 11, 2014.

21. Rosenthal E: In need of a new hip, but priced out of the U.S. New York Times, August 3, 2013. Available at www.nytimes.com. Accessed July 11, 2013.

22. Freedman J: Pay more, get less. How American socio-economic policy is falling short. New America Foundation. April 30, 2014. Available at newamerica.net. Accessed July 11, 2014.

23. Centers for Medicare & Medicaid Services: Medicare provider utilization and payment data: Physician and other supplier. April 23, 2014. Available at www.cms.gov. Accessed July 11, 2014.

24. Price CC, Eibner C: For states that opt out of Medicaid expansion: 3.6 million fewer insured and $8.4 billion less in federal payments. Health Aff (Millwood) 32:1030-1036, 2013.

25. The Council of Economic Advisers: Missed opportunities: The consequences of state decisions not to expand Medicaid. Executive Office of the President of the United States, July 2014. Available at www.whitehouse.gov. Accessed July 11, 2014.

26. Kantarjian HM, Steensma DP, Light DW: The Patient Protection and Affordable Care Act: Is it good or bad for oncology? Cancer 120:1600-1603, 2014.

27. Sommers B, Long S, Baicker K: Changes in mortality after Massachusetts health care reform: A quasi-experimental study. Ann Intern Med 160:585-593, 2014.

 

Dr. Kantarjian is Chairman of the Leukemia Department at The University of Texas MD Anderson Cancer Center and a Baker Institute Scholar for Health Policies at Rice University, Houston.

Disclaimer: This commentary represents the views of the author and may not necessarily reflect the views of ASCO.

 



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