Medical Mystery: Something Happened to U.S. Health Spending After 1980 - The New York T... - 0 views
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The United States devotes a lot more of its economic resources to health care than any other nation, and yet its health care outcomes aren’t better for it.
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That hasn’t always been the case. America was in the realm of other countries in per-capita health spending through about 1980. Then it diverged.
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It’s the same story with health spending as a fraction of gross domestic product. Likewise, life expectancy. In 1980, the U.S. was right in the middle of the pack of peer nations in life expectancy at birth. But by the mid-2000s, we were at the bottom of the pack.
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“Medical care is one of the less important determinants of life expectancy,” said Joseph Newhouse, a health economist at Harvard. “Socioeconomic status and other social factors exert larger influences on longevity.”
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For spending, many experts point to differences in public policy on health care financing. “Other countries have been able to put limits on health care prices and spending” with government policies
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“The differential between what the U.S. and other industrialized countries pay for prescriptions and for hospital and physician services continues to widen over time,”
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periods of rapid growth in U.S. health care spending coincide with rapid growth in markups of health care prices. This is what one would expect in markets with low levels of competition.
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Although American health care markets are highly consolidated, which contributes to higher prices, there are also enough players to impose administrative drag. Rising administrative costs — like billing and price negotiations across many insurers — may also explain part of the problem.
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The additional costs associated with many insurers, each requiring different billing documentation, adds inefficiency
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“We have big pharma vs. big insurance vs. big hospital networks, and the patient and employers and also the government end up paying the bills,”
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Though we have some large public health care programs, they are not able to keep a lid on prices. Medicare, for example, is forbidden to negotiate as a whole for drug prices,
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once those spending constraints eased, “suppliers of medical inputs marketed very costly technological innovations with gusto,”
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, all across the world, one sees constraints on payment, technology, etc., in the 1970s and 1980s,” he said. The United States is not different in kind, only degree; our constraints were weaker.
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Mr. Starr suggests that the high inflation of the late 1970s contributed to growth in health care spending, which other countries had more systems in place to control
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These are all highly valuable, but they came at very high prices. This willingness to pay more has in turn made the United States an attractive market for innovation in health care.
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international differences in rates of smoking, obesity, traffic accidents and homicides cannot explain why Americans tend to die younger.
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Some have speculated that slower American life expectancy improvements are a result of a more diverse population
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But Ms. Glied and Mr. Muennig found that life expectancy growth has been higher in minority groups in the United States
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even accounting for motor vehicle traffic crashes, firearm-related injuries and drug poisonings, the United States has higher mortality rates than comparably wealthy countries.
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The lack of universal health coverage and less safety net support for low-income populations could have something to do with it
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“The most efficient way to improve population health is to focus on those at the bottom,” she said. “But we don’t do as much for them as other countries.”
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The effectiveness of focusing on low-income populations is evident from large expansions of public health insurance for pregnant women and children in the 1980s. There were large reductions in child mortality associated with these expansions.
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A report by RAND shows that in 1980 the United States spent 11 percent of its G.D.P. on social programs, excluding health care, while members of the European Union spent an average of about 15 percent. In 2011 the gap had widened to 16 percent versus 22 percent.
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“Social underfunding probably has more long-term implications than underinvestment in medical care,” he said. For example, “if the underspending is on early childhood education — one of the key socioeconomic determinants of health — then there are long-term implications.”
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Slow income growth could also play a role because poorer health is associated with lower incomes. “It’s notable that, apart from the richest of Americans, income growth stagnated starting in the late 1970s,”
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History demonstrates that it is possible for the U.S. health system to perform on par with other wealthy countries
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That doesn’t mean it’s a simple matter to return to international parity. A lot has changed in 40 years. What began as small gaps in performance are now yawning chasms
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“For starters, we could have a lot more competition in health care. And government programs should often pay less than they do.” He added that if savings could be reaped from these approaches, and others — and reinvested in improving the welfare of lower-income Americans — we might close both the spending and longevity gaps.