U.S. Healthcare Costs & Benefits

Everybody recognizes that the United States spends considerably more on healthcare than other “western” countries do. It doesn’t matter if you look at per capita expenditure or percentage of GDP spent on health services, we rank at the top by a large margin. Of course, how much we spend is only part of the story. If, for example, we enjoyed better care and, as a consequence, better health, then one might conclude that all that “extra” money is worth it. The story line would be: we live in an affluent society, and we choose to spend a large portion of our wealth on healthcare to enjoy the added benefits of better health. Most observers have concluded, however, that we don’t enjoy better health than our western European friends, and so conclude that health care fails to deliver value – we are spending more than others, and not getting any measurable benefit. This is one of several arguments (I hope to address others in upcoming posts) for the need to lower health care expenditures in the US.

I agree that we spend more on healthcare than we need to, but it is important to consider that population health measures like life expectancy at birth, or rates of chronic disability, are poor measures of the value of our healthcare expenditures. Why?

Because most experts agree that “healthcare” – everything we do for and to patients, from diagnostic blood work to cancer chemotherapy, from well-baby checks to neurosurgery – accounts for only about 15% of the variation in health outcomes. That means that most of what happens to people’s health – who gets sick, who becomes disabled, who dies and when – depends much more on other factors than on their interactions with us. Principal among those are genetic factors, socioeconomic factors, environmental factors, and personal behaviors. To pin differences in broad measures of the health of the population on the narrow healthcare slice of the pie misses the point.

Yes, we as a society spend a lot on healthcare, and yes, there are important reasons why we should spend less, and can do so without hurting people. But we should be clearer in our discussions of costs and benefits.

What do you think?

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