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US healthcare; why is it more expensive?
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Topic Started: Dec 8 2011, 09:56 AM (149 Views)
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big al
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Dec 8 2011, 09:56 AM
Post #1
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Getting to the Root of Health Care Costs by Joanne Sammer
Created 12/07/2011 - 14:23 The United States spends by far the most per person on health care than any other country, according to a new report from the Organization for Economic Cooperation and Development (OECD). The finally tally shows expenditures of $7,960 for the U.S. compared to $3,233 per person for the average OECD country.
Of course, the OECD includes countries from across the development spectrum. However, even when you compare U.S. health care spending to a similarly wealthy country, there is a significant gap. For example, compared to Switzerland, whose citizens have roughly the same income level as Americans, the U.S. spends nearly $3,000 more per person per year on health care.
This is not necessarily news to any CFO who has been paying attention to employee benefit costs or related trends. What is interesting about the OECD report is the insight it provides into the root causes of these higher costs.
The OECD report takes a closer look at the drivers of U.S. health care costs by comparing spending to five other developed countries with relatively high health care spending (Switzerland, Canada, Germany, France, and Japan). The report shows that the U.S. spends far more than the average of these five countries in the core areas of health care spending:
hospitals/nursing homes (163% of the average); ambulatory care, including physicians, specialists, and dentists (238% of the average); pharmaceuticals and medical goods (152% of the average); public health and administration (274% of the average); and overall health care spending for these five countries (189% of the average). It would be difficult to blame the spending disparity solely on administrative cost even though administration costs alone account for about 7% of U.S. health care spending. This is about the same amount spent by France and Germany. Canada and Japan focus about 4% of health spending on administration.
It is the cost of care that is driving a significant amount of the differences in spending between countries. For example, in 2007, percutaneaous transluminal coronary angioplasty, which opens blocked coronary arteries without open heart surgery, cost $14,378 in the U.S. and just $3,347 in Germany. The study looked at the cost of several procedures and in all of them—from childbirth to appendectomy to knee replacement—the cost of care was greater than, and in some cases considerably greater than, the cost in of the other five countries in the peer group. Pharmaceuticals, as we have all heard, are also considerably more expensive in the U.S. than in other countries.
In addition to high prices for health care, underdeveloped primary care could also have a role in higher costs. The report states that, “The shortage of family doctors contributes to the poor primary care performance.” For example, the report traces the high rate of hospital admissions for asthma and chronic obstructive pulmonary disease (COPD) to poor primary care. In 2008, the U.S. had the highest rate of hospital admissions for asthma (120.6 per 100,000) and COPD (230 per 100,000) among OECD countries, compared to the average for OECD countries of 43.4 per 100,000 for asthma and 198 per 100,000 for COPD. With appropriate primary care, some portion of these admissions could be avoided.
The full 204-page report is available for download.
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Big Al
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Location: Western PA
"jesu, der simcha fun der man's farlangen." -bachophile
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The 89th Key
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Dec 8 2011, 10:04 AM
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This thread reminds me of a post I saw on facebook this morning from my high school friend Kara, who's in the UK right now.
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kenny
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Dec 8 2011, 10:19 AM
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Insurance company profits.
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John D'Oh
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Dec 8 2011, 10:22 AM
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- The 89th Key
- Dec 8 2011, 10:04 AM
This thread reminds me of a post I saw on facebook this morning from my high school friend Kara, who's in the UK right now.  She should elect to pay extra and get private health insurance.
I'm not convinced the NHS is what I'd describe as 'much-vaunted'. The Canadian system is much better, in my experience.
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What do you mean "we", have you got a mouse in your pocket?
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Renauda
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Dec 8 2011, 10:27 AM
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- The 89th Key
- Dec 8 2011, 10:04 AM
This thread reminds me of a post I saw on facebook this morning from my high school friend Kara, who's in the UK right now.  Sorry to hear that about Britain's NHS. Our family has spent a lot of time utilizing the free health care system here the past 12 months- as a matter of fact, we yet again had to tap into the hospital emergency services just this past Sunday afternoon.
Everytime we received prompt and excellent medical attention.
First rate as far as I'm concerned.
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