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Report: U.S. Tops in Health Spending but Quality in Question

By Jane Norman, CQ HealthBeat Associate Editor

November 23, 2011 -- The United States spends far more on health care than many other developed nations yet all that money doesn't necessarily mean the quality of the care excels, says a report on international health released by the Organization for Economic Cooperation and Development (OECD).

Hospital services cost much more in the United States and pharmaceutical prices are much higher compared to other countries, says the study by the Paris-based think tank. Yet there are fewer practicing physicians per 1,000 population, fewer doctor consultations and shorter hospital stays in the U.S. than in other nations—and more CT scans, knee replacements, and Caesarean sections.

But when it comes to beating cancer, the United States shines, with breast cancer and colorectal cancer survival rates topping the international charts. On the other hand, there are comparatively high hospital admission rates for preventable conditions like asthma, diabetes and hypertension.

"The U.S. health system is very good at providing good quality cancer care and actually very poor at providing anything to do with primary care," Mark Pearson, head of the OECD health division in Paris, said in a briefing with reporters.

The perspective on health care costs in the United States as opposed to other nations comes just two days after a congressional deficit panel failed to come on agreement on a plan to trim the deficit, including spiraling entitlement costs for public health programs. Under the debt law, the next step will be an automatic cut in Medicare provider payments of up to 2 percent per year starting in 2013.

The OECD said in its report that U.S. health spending was $8,000 per capita in 2009. That's two-and-a-half times higher than the average for the 34 nations that belong to the group, including such European countries as Germany, France, the United Kingdom, and Italy, as well as some South American and Asian nations like Chile and Japan.

The U.S. "even spends twice as much as France, for example, a country which is generally accepted as having very good health services," says the report. Some nations in the study have universal health care primarily financed by governments while others have multiple payer systems akin to the United States system.

Pearson said that the U.S. is an "absolutely massive outlier" compared to spending per capita in other nations.

The United States spends 17.4 percent of gross domestic product (GDP) on health care, compared to 12 percent in the Netherlands and an average of 9.6 percent for other OECD nations, said Pearson. However, globally, health care is rising as a share of GDP for many countries, he said.

Medicare and Medicaid take up more of GDP in the U.S. than the average for public programs in OECD countries, he noted. "This is not just a story about private spending in the United States being very high," he said.

Richer countries do spend more on health, said Pearson. But there is a "huge difference" in health spending even looking at the United States in comparison with countries with similar incomes per capita such as Switzerland, he said.

More is spent on hospitals, physicians and dentists as well as administrative costs though other countries with multiple payers may be similar in administrative costs, he said.

In terms of specific procedures, the U.S. pays the highest prices in the study for appendectomies, normal childbirths, Caesarean sections, coronary artery bypass graft, hip replacement, and knee replacement, said Pearson.

Yet there are 2.4 practicing physicians per 1,000 population in the U.S. compared to 3.1 per 1,000 in the 34 OECD countries on average. "It's actually very low in the United States," said Pearson.

There are 3.9 doctor consultations per capita in the United States compared with 6.5 per capita in the other countries on average. And there are 3.1 hospital beds per 1,000 population compared to 4.9 per 1,000 in the foreign countries, he said.

Yet there is "an awful lot of expensive diagnostic equipment" used more frequently than in other nations, said Pearson, such as MRI units and CT scanners.

For cancer, though, the United States is providing "the very best care" judging from survival rates, he said. The five-year survival rate is the highest for all the countries studied, and the five-year rate for survival of colorectal cancer is bested only by Japan.

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