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Reuters: U.S. health spending twice other countries’ with worse results

U.S. health spending twice other countries’ with worse results
March 13, 2018

(Reuters Health) – The U.S. spends about twice what other high-income nations do on health care but has the lowest life expectancy and the highest infant mortality rates, a new study suggests.

More doctor visits and hospital stays aren’t the problem. Americans use roughly the same amount of health services as people in other affluent nations, the study found.

Instead, health spending may be higher in the U.S. because prices are steeper for drugs, medical devices, physician and nurse salaries and administrative costs to process medical claims, researchers report in JAMA.

“There’s no doubt that administrative complexity and higher drug prices both matter – as do higher prices for pretty much everything in U.S. healthcare,” said lead study author Irene Papanicolas of the London School of Economics and the Harvard T.H. Chan School of Public Health in Boston.

“These inefficiencies are likely the product of a number of factors including a reliance on fee-for-service reimbursement, the administrative complexity of the U.S. health care system and the lack of price transparency across the system,” Papanicolas said by email.

For the study, researchers examined international data from 2013 to 2016 comparing the U.S. with 10 other high-income countries: the U.K., Canada, Germany, Australia, Japan, Sweden, France, Denmark, the Netherlands, and Switzerland.

In 2016, the U.S. spent 17.8 percent of its gross domestic product (GDP) on healthcare. Other countries’ spending ranged from a low of 9.6 percent of GDP in Australia to a high of 12.4 percent of GDP in Switzerland.

A large part of this was administrative costs, which accounted for 8 percent of GDP in the U.S., more than double the average of 3 percent of GDP.

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