The effectiveness of a countrys medical care is inadvertently impacted by its health policies and economics. These factors determine the allotment of health care funds from the GDP. The U.S. is one of countries in the world that allocates a substantial part of its GDP to facilitate health care provision. However, research studies, such as Bradley, Elkins, Herrin, and Elbel (2011) intimate that the health outcomes of the U.S. citizens are not commensurate with the governments health expenditures. The current paper examines the micro and macroeconomics of medical care in the U.S., comparing it with those of other developed countries, such as Canada, the UK, and Australia that may be considered its peers. To achieve this, the paper will compare and contrast the health care expenditures and outcomes in the U.S. and in the international market. The performed analysis indicates that the U.S. spends more on health care than its high-income earning contemporaries, yet its health care services are of poorer quality.
Medical Care System
The U.S. health care system significantly differs from those of the other high-income earning countries, such as Canada, the UK, France, Sweden, Japan, Australia, and New Zealand, among others. In most of the European countries, the health care system is funded primarily by the general taxes (Getzen, 2013). These countries appropriate a single-payer system, where the government is the primary financier of medical care expenses, and health care services are afforded to all of the residents. The U.S. is different from the above mentioned countries, since it appropriates a multi-payer system (Getzen, 2013). Different entities are involved in reimbursing the physician for the care services offered in Medicaid, Medicare, and other health care programs. These third party entities include the federal government, state governments, and the commercial health insurance providers, among others. The major undoing of the multi-payer system is that it does not cover all of the U.S. residents. Research studies on the same topic indicate that only 84% of the U.S. residents have a full medical insurance coverage (Ridic, Gleason, & Ridic, 2012). The multi-payer system has been incessantly blamed for the ballooning health care costs in the U.S. because it makes it harder to affect cost control measures, unlike in countries with a single-payer. In Canada, for instance, the central government is responsible for controlling health care costs through preparing a fixed budget and predetermining the physicians fees (Pylypchuk & Sarpong, 2013). The patients are not charged with any copayments. In the U.S., the physicians are at liberty to not only charge the agreed 20% copayment but also other costs they may deem necessary (Foster, 2010). Accordingly, the health care costs are higher in the U.S. than in the peer countries around the globe, necessitating higher budgetary allocations. However, as it is now evident, an increased budgetary allocation is not the solution as the U.S. health care system continues to sideline some sections of the population, and to those it confers the benefits, it does so at an inflated cost.
The U.S. is the country which spends the most on health care, as compared to all the worlds countries. No country comes even close to spending as much as the U.S. does on its health care programs. A research study conducted by the Organization for Economic and Cooperation Development (OECD) determined that in 2013, the U.S. allocated 17% of its GDP to fund its health care system (The Commonwealth Fund, 2016). The allocation represents 30% of extra allotment, as compared to the second-highest country, France, which spent 11.6% of its GDP on health care programs (Himmelstein & Woolhanlder, 2016). During the same period, the UK, one of the countries with the most efficient medical care systems in the world, has allocated only 8.8% of its GDP to finance its health care sector, almost halving the U.S. allotment (Himelstein & Woolhandler, 2016). Other countries that should also serve as benchmarks for the U.S. also had significantly lower allocations. For example, Sweden set aside 11.5% of its GDP for health care purposes; Germany allocated 11.2%; Switzerland allocated 11.1%; Canada allotted 10.7%, while Australia used 9.4% (The Commonwealth Fund, 2016). While the U.S. rate of spending growth in health care is on the decline since 2009, the gradient of decrease is far much less than those of its contemporaries.
The U.S. also has a higher spending rate per person, yet the higher allocations do not translate into better health care services, at least as compared to what its peers achieve with lower allocations. The U.S. has an average medical care per capita expenditure of U.S. $9,086 (Highfill, 2016). It represents an overspending of great proportions, considering that the OECD median expenditure is U.S. $3,661. In 2013, the UK had a spending per capita of U.S. $3,364; Canada had U.S. $4,569, while Sweden had U.S. $5,153 (The Commonwealth Fund, 2016). It continually confounds why the U.S. spends more money on a single person, yet individuals in other high-income countries have better health outcomes.
Crucially, even after netting a superior health care spending per capita, the U.S. residents incur significant marginal out-of-pocket medical expenditures. A study conducted by Foster (2010) established that the U.S. residents spent U.S. $1,074 as out-of-pocket medical expenses paying for copayments, prescription drugs, and health insurance contributions. This is as compared to U.S. $321 for UK residents, U.S. $623 for Canadian residents, and the OECD median of U.S. $625 (Foster, 2010). Residents of the countries like France (U.S. $277) and the Netherlands (U.S. $277) tend to spend less than a quarter of what the U.S. citizens spend as out-of-pocket necessities (Highfill, 2016). Only the Swiss outspent the U.S. citizens in out-of-pocket requirements, using an average of U.S. $1,630 (Highfill, 2016). Having funded the health programs to the extent it has, the U.S. citizens should ideally have a free access to all of the medical requirements.
Furthermore, despite the higher health care expenditure rates, the U.S. health care system covers a less than proportion percentage of its populations. The 8.8% the UK allocates is meant to cover all of the UK residents, affording universal access (Conway, Goodrich, Machlin, Sasse, & Cohen, 2011). The 17% the U.S. allocates only manages to cover 34% through its public programs, including the Medicare and Medicaid, among others (Conway et al., 2011). To further compound the situation, the U.S. medical care system is significantly understaffed. In 2013, its ratio of practicing physicians per 1000 people stood at 2.6, as compared to the OECD median of 3.2 (National Bureau of Economic Research, 2016). During the same time period, Canada recorded 2.5, while Norway had the best ratio of practicing physicians per 1000 people with 4.3 indicating greater access to quality medical care.
Medical Care Pricing
Despite the superior percentage allocation of GDP to the health care sector, the U.S. has higher health care services prices, as compared to the international market. The costs of pharmaceuticals and health procedures are higher than in countries, such as the UK and Canada. The average price of bypass surgery in the U.S. is U.S. $75,345; U.S. $30,000 more than what is charged in Australia for the same procedures (The Commonwealth Fund, 2016). Another procedure, appendectomy, proved to be twice as expensive in the U.S. (U.S. $13,910) as compared to Australia (U.S. $5,177). Another phenomenon involves MRI and CT scanners. They are more expensive to access in the U.S. than in Canada, despite the fact that there are twice as many MRI and CT scanners in the U.S. than there are in Canada. The trend hardly changes the in-patient pharmaceuticals. In fact, the costs of accessing quality pharmaceutical drugs are twice as expensive in the U.S., as compared to the second most expensive country, Australia (Bradley et al., 2011). One would expect that since the U.S. government invests more money in the provision of care services that the residents would afford them at lower prices, but that is hardly the case. The structural inefficiencies brought about and sustained by the multi-payer reimbursement model make it hard to maneuver the challenge of cost inflation in the U.S.
The U.S. invests a modest amount of its GDP in social services to ease the burden in the health care sector. It allocates 9% of its GDP to cover social services areas, including disability benefits, retirement benefits, employment stimulation programs, and supportive housing, among others (Nyman & Trenz, 2016). It is one of the health economics areas, where the U.S. performance is desirable (Getzen, 2013). It outspends and spends just as much as its international peers, such as France, Sweden, and New Zealand who have consistently outperformed the U.S. in most of the other health care parameters. However, the U.S. can even improve on its social services allocation. France, for instance, spent 21% of its GDP on social services; Sweden spent 21%, while Switzerland allocated 20% of its GDP to social services (The Commonwealth Fund, 2016). The three countries allocated higher proportions to social services, yet they still fully fund their health care systems. Therefore, the U.S., with its hugely private-financed medical system, is ought to allocate even greater percentage to ease the burden on its citizens (Getzen, 2013). However, if the U.S. increases the share of economic proceeds allocated to the medical sector, then it would not be prudent to increase the social services provision, as, while not necessarily mutually exclusive, they are complementary.
The U.S. citizens on several measures have worse health outcomes than their international high-income earning contemporaries. For instance, in the study conducted by the OECD, the U.S. citizens had the lowest life expectancy rate, as compared to Canada, UK, Japan, France, and the Netherlands among others. Life expectancy in the U.S. stood at 78.8 years in 2013, as compared to 81.5 years in Canada, 82.3 years in France, 83.4 years in Japan, 81.1 years in the UK, and 82 years in Sweden (The Commonwealth Fund, 2016). Life expectancy in the U.S. is below the OECD median of 81.2 years, indicating that the average U.S. lives less, as compared to most of the elderly in other developed countries. However, some studies have disputed the findings that suggest that the U.S. citizens have a lower life expectancy. A study by Venkataramani, Chatterjee, Kawachi, and Tsai (2016) posited that most of the research studies on life expectancy do not take into consideration the confounding factors. Issues like increased mortality rates among young adults in the U.S. due to accidents, homicides and increased heart disease incidence significantly influence the life expectancy rate, yet are rarely taken into consideration when ascertaining the life expectancy levels.
The U.S. also exhibited high infant mortality rates, as compared to other high income-earning counterparts. In 2013, the U.S. recorded 6.1 infant deaths per every 1000 live births. The rate was way higher than the OECD median that stood at 3.5. Other countries also exhibited significantly better outcomes in so far as the infant mortality rates were concerned. For instance, Canada recorded 4.8%, Australia had 3.6%, the UK had 3.8%, while Japan had the lowest infant mortality rate in the world with 2.1%.
Additionally, the U.S. also exhibited poorer outcomes with regards to the prevalence of chronic health conditions. A survey conducted by Venkataramani et al. (2016) established an upward of 68% of the senior aged 65 years and above suffer from at least two chronic conditions. In the UK only 33% of the elderly above 65 years old had multiple chronic illnesses, while the rate was slightly higher in Canada - 56% (Venkataramani et al., 2016). While it had higher chronic conditions prevalence rate, it also had better health care interventions to treat most of them. The U.S. citizens had incredibly better outcomes in the treatment of cancer. It ranks among the first in the world in treating the six types of cancer. In 2007, the U.S. recorded only 164 cancer-related deaths per every 100,000 cancer patients; as compared with UKs 193, Japans 160, and Swedens 163 per every 100,000 cancer patients (The Commonwealth Fund, 2016). Crucially, the U.S. is also experiencing a decline in cancer-related deaths over the past three decades, demonstrating the improvement of health outcomes. However, while the U.S. exhibited remarkable improvements in cancer-related outcomes, it still had higher mortality rates per ischemic heart disease and amputations. There were 128 deaths per every 100,000 ischemic heart disease patients in the U.S., as compared to the OECD median of 95 (The Commonwealth Fund, 2016). In most of the health outcomes parameters, the U.S. performed poorly, despite the fact that it allocates significantly higher percentages of its GDP to fund its health care system.
It is evident that the U.S. spends a considerable percentage of its GDP to fund its health care system. However, despite outspending all of its international peers, the U.S. residents do not enjoy better health outcomes, as compared to its contemporaries. The multi-payer system seems to be the inherent problem, as the effectiveness of the allocated amounts decreases. The U.S. citizens still have to fork out higher out-of-pocket amounts of money to acquire quality health care services, despite the amount of public taxes used to fund the health care programs. They also have to pay more for health procedures and drugs than their Canadian and European counterparts. The government should consider revising the existent medical care system in the U.S. as its financing is evidently not commensurate with the health benefits it confers to the U.S. citizens.