America’s High Cost Healthcare Problem

May 13, 2016
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When it comes to healthcare in America, it is no secret that our system requires profound change.  Currently America has a high cost healthcare problem. Healthcare costs have been increasing dramatically and substantially for years.  Current healthcare spending has reached a rate which is unsustainable. 

When it comes to healthcare in America, it is no secret that our system requires profound change.  Currently America has a high cost healthcare problem. Healthcare costs have been increasing dramatically and substantially for years.  Current healthcare spending has reached a rate which is unsustainable. 

According to the CDC “U.S. health care spending grew 5.3 percent in 2014, reaching $3.0 trillion or $9,523 per person.  As a share of the nation’s Gross Domestic Product, health spending accounted for 17.5 percent.”

Some estimate this number to be even higher.  For instance, according to a recent review by the Kaiser Family Foundation as much as 23% of the Federal budget is spent on healthcare.  More than defense spending, nearly as much as social security, and vastly more than non-defense discretionary spending.

gdp healthcare

The high cost of healthcare in the U.S. is even more problematic, as additional research shows that we are getting very little for the amount of money we are spending.

According to a recent report published by The Commonwealth Fund:

“Out of the top thirteen high-income countries in the world, not only does the United States spend significantly more on healthcare, but also despite significantly higher spending, reports poor health outcomes across multiple key health measures.” 

Here are some troubling statistics about the high cost of healthcare:

  • The U.S. reports the highest per capita spending on healthcare out of all examined countries, with $9,086 spend per person on average on care annually
  • Additionally, this high cost of care is reflected by the second highest out of pocket healthcare expenses of all studies countries, with the average American spending $1,074 per year on co-pays and deductibles
  • Despite this significant spending, Americans see the doctor less often than individuals in other countries, and have access to fewer practicing physicians and fewer hospital beds.

Finally, health care costs in general are significantly higher than in other countries.  For example, the average cost of bypass surgery in the U.S. was $75,345, which is $30,000 higher than the next highest country – Australia – where the same procedure costs $42,130

With significantly more spending, you might assume that the U.S. population was healthier than those in other comparative countries.

Think again.

The United States ranks among the worst across several areas in comparison to other countries studied. Not only does America have a high cost healthcare problem, but a low quality healthcare problem as well.

As identified in the issue brief released by the Common Wealth Fund:

  • The U.S. has the lowest overall life expectancy at birth, with the average life expectancy reported to be 78.8 years – versus a median expectancy of 81.2 years
  • The U.S. reports the highest percentage of the population over the age of 65 with two or more chronic conditions, with 68% of the population in this age range suffering from two or more chronic conditions
  • The U.S. also reports the highest infant mortality rate of the countries studied, with a 6.1 mortality rate per 1,000 live births – nearly double the median rate of 3.5

We cannot outspend the current healthcare problems in the United States, and cost reduction measures alone would only serve to erode the quality of care even further.

A careful balance between the cost of healthcare and the quality of health outcomes much be achieved in order to improve the American healthcare system, and eliminate America’s high cost healthcare problem.

DocResponse is working toward solving healthcare’s problems by helping to decrease unnecessary utilization, providing preventive recommendations to help keep people healthy, and providing free diagnostic tools so that American’s can avoid going to the emergency room when it isn’t necessary.

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