Health Systems | By | 04/04/18 | 3 Minute Read

Why Is Healthcare So Expensive In The U.S.?

Harvard healthcare professor Ashish Jha previously believed that the U.S. healthcare system was more specialty-driven, as opposed to Western Europe where there are more primary care physicians. The result? High-cost services in the U.S.

It was a notion that he assumed was the truth. But when looking into whether his own premise was correct, Jha and his colleagues came to believe otherwise. His findings, which were recently published in March 2018 in the Journal of the American Medical Association found that the proportion of primary care physicians in the United States was the same as the mean of 10 other countries – UK, Germany, Sweden, France, The Netherlands, Switzerland, Denmark, Canada, Japan and Australia.

Yet in 2016, the U.S. still spent nearly twice as much on healthcare as 10 high-income countries with that amount equaling 17.8% of its gross domestic product. or $9,403 per capita. Those other 10 high-income countries’ average spend? 11.5% of their gross domestic product.

Drivers of this spending by the U.S. appear to be additional spend or higher prices in general: for pharmaceuticals, spending per capita was $1,443 in the U.S. vs. a range of $466 to $939 in other countries – and administrative costs (or activities relating to planning, regulating, and managing health systems and services) are higher. Plus, doctors are paid more, and hospital services and diagnostic tests cost more.

And this healthcare spend doesn’t appear to be slowing down. It’s projected to rise 5.3% in 2018, according to the U.S. Centers for Medicare and Medicaid Services (CMS). The government health agency estimates that 2017 spend was nearly $3.5 trillion.

Other interesting findings:

  • When it comes to doctor visits and hospital stays, the U.S. comes out slightly below average. Japan has the greatest number of physician visits and hospital bed stays, and longest length of stay in a given year.
  • The U.S. had the highest percentage of adults who were overweight or obese at 70.1% (the range for other countries was 23.8% to 63.4%, and the mean of all 11 countries, 55.6%).
  • Life expectancy in the U.S. was the lowest of the 11 countries at 78.8 years (the range for other countries, 80.7 to 83.9 years; and the mean of all 11 countries, 81.7 years).
  • In terms of surgical procedures, the U.S. ranks in the top three for the most total knee replacements, hysterectomies, cesarean deliveries, and cataract surgeries.

This article is not intended to substitute for informed medical advice. You should not use this information to diagnose or treat a health problem or condition. Always check with your doctor before changing your diet, altering your sleep habits, taking supplements, or starting a new fitness routine.

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