5 things to know about US healthcare spending compared to 10 other high-income countries

Labor, supply and administrative costs are key reasons why the U.S. outpaces other high-income countries in healthcare spending, according to a study published in JAMA.

The research, led by Irene Papanicolas, PhD, from the department of health policy and management at the Harvard T. H. Chan School of Public Health in Boston, examines 98 indicators across 10 high-income countries. The indicators, derived from data spanning 2013 to 2016, fell into seven facets: general spending, population health, structural capacity, utilization, pharmaceuticals, access and quality, and equity.

Here are five findings from the study.

1. The U.S. spent nearly two times as much on healthcare as 10 high-income countries in 2016. This expense didn't lead to higher health outcomes, as the U.S. performed poorer on several population health outcomes than the other countries, the authors found. 

2. While the U.S. spent 17.8 percent of its gross domestic product on healthcare in 2016, spending in the 10 other countries ranged from 9.6 percent of GDP in Australia to 12.4 percent of GDP in Switzerland. 

3. In terms of physician workforce, the U.S. didn't differ largely from the other countries, with 2.6 physicians per 1,000 people. The U.S. also didn't differ much in terms of healthcare use. The U.S saw 192 discharges per 100,000 people.

4. However, the authors found pronounced differences in administrative costs. Administrative costs of care reflected 8 percent of healthcare spending in the U.S., while administrative costs ranged from 1 to 3 percent in the other countries. U.S. spending on pharmaceuticals also outpaced other countries, with spending at $1,443 per capita in the U.S. compared to $466 to $939 in other countries. Lastly, physician and nurse salaries were higher in the U.S. than in other countries. A generalist physician was paid $218,173 in the U.S. during the study period, compared to $86,607 to $154,126 in the other countries.

5. "Efforts targeting utilization alone are unlikely to reduce the growth in healthcare spending in the United States; a more concerted effort to reduce prices and administrative costs is likely needed," the authors concluded.

For the full study, click here

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