US spends more on medical care per person than any country, yet life expectancy isn’t higher, Part II

Posted on August 1, 2012 by

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In Part I we learned the unpleasant, nay, shocking, truth that sometimes my parents were wrong (I see no need to tell them, though, so let’s keep it between us).

They were sure that in life one got what they paid for–yet, as evidenced by the graph you simply must see in the last post, America pays far, far more per capita than any other country–and its average life expectancy falls below countries that spend average, and even below average, amounts per person on healthcare. [You might recall that South Korea, Portugal and Finland were all below-average spenders who managed to keep their populations alive longer. It's painful.]

So how to explain the conundrum of a country that forks over multiples more than the next countries in per capita spending–and still loses the life expectancy race?

Well, fortunately for us, a paper that came out in May 2012 that promises to clarify this puzzle. Titled, aptly, “Explaining High Health Care Spending in the United States: An International Comparison of Supply, Utilization, Prices, and Quality ” it was written by one David Squires, Senior Research Associate International Program in Health Policy and Innovation at The Commonwealth Fund which is a private foundation in the United States dedicated to promoting an efficient, quality healthcare system.

Firstly the paper re-affirms that per capita spending in the U.S. is massively larger than in any other  country (see graph).

(Statistics from The Commonwealth Fund)

But then it goes on to explain why such expenditures don’t pay off in greater life expectancy.

Before we get to the real reasons, it’s interesting to note that certain beliefs held about the challenges Americans face in healthcare simply aren’t true.

For example, one of the more basic assumptions Americans hold about why their healthcare costs are so high is that it is due to the ‘silver tsunami,’ the aging of our population.

In fact, the U.S., writes Squires,

“has a relatively young population compared with the other study countries. . . Only 13 percent of the U.S. population was older than 65 in 2009, compared with the OECD median of nearly 16 percent. New Zealand was the only study country with a smaller elderly population than the U.S., whereas more than one-fifth of the populations of Germany and Japan were over 65. Moreover, the proportion of the U.S. population over age 65 has grown relatively slowly in recent years, rising only 0.5 percent since 1999, suggesting that an aging demographic has not been a primary driver of health spending increases over the past decade.” 

The research is quite clear–we can’t blame ballooning health costs on a disproportionate number of elderly people. Excuse one down the drain.

The second cause that isn’t leading to the ridiculously high cost of American treatment vis-a-vis any other country?

Smoking.

Believe it or not, American adults were the least likely to smoke in all of the countries studied except Sweden.

So hypothesis two went up in a puff of smoke as well.

But once we’re talking about lifestyle as a determinant of health, there is something about Americans that does drive up healthcare spending. It’s not our age, it’s not our smoking–it’s our weight.

One-third of the adult American population is obese (body mass index of 30 or above)–a higher proportion than in any studied country.

That could hit Americans in their pocketbooks when it comes to healthcare.  According to the Strategies to Overcome and Prevent Obesity Alliance:

  • In 2008,medical spending attributable to obesity is estimated to have been $147 billion, which is 9.1 percent of annual medical spending.
  • Nearly $40 billion of increased medical spending in 2006 was found to be due to the increased prevalence of obesity.
  • In 2006, per capita medical spending for an obese adult was $1,429 greater than for a normal adult.

Clearly our expenditures on obesity raise our total spending, but the Commonwealth Fund paper suggests it’s a wash, with a younger population and lower rates of smoking bringing healthcare costs down at the same time that obesity brings them up, yielding no significant net gain or loss.

We’ll have to look for the real reasons behind America’s exorbitant healthcare costs–and lack of results for what they pay–elsewhere, in our final post on the topic.

Posted in: Health Care, Research