Healthcare Costs

The American healthcare industry is the most costly and complex in the world, when compared with other high-income industrialized nations, according to the results of a study released Wednesday.

While Americans spend more on healthcare—$2.7 trillion, or nearly 18 percent of the country's gross domestic product—they are also the most likely to forgo medical care because of cost, to have difficulty paying for care despite being insured, and to encounter time-consuming paperwork due to insurance plan complexity, according to the Commonwealth Fund, a healthcare watchdog and advocacy group.

But with frustration comes change, and many experts believe that the U.S. healthcare system is beginning to get the overhaul it needs.

Stay Informed With These 11 Tips to Save Money on Your Healthcare »

U.S. Is First in Spending (and Frustration)

The Commonwealth Fund surveyed 20,045 adults from 11 countries to assess their experiences with the healthcare systems in their countries. The study is appears in the latest issue of the journal Health Affairs.

Healthcare in the U.S. costs patients substantially more than in Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom. According to the study, it is also “unique in its complexity of health insurance designs, mix of public and private insurance, and relatively limited insurance market regulations,” the study found.

The U.S. spends more than $8,508 per person per year, but $606 of it goes to administrative costs. This is more than twice as much money per patient as in any other country.

And more money does not translate into greater satisfaction. Researchers found that 32 percent of U.S. adults spent “a lot of time” dealing with insurance paperwork, including disputes and denied claims. In contrast, 17 to 25 percent of people in countries with more competitive healthcare markets like Switzerland, the Netherlands, and Germany said the same.

“The U.S. spends more on health care than any other country, but what we get for these significant resources falls short in terms of access to care, affordability, and quality,” Commonwealth president Dr. David Blumenthal, said in a statement “The American people clearly want fundamental reform. This explains why the individual provisions of the Affordable Care Act poll so well with the American public.”

Americans know something is wrong: three out of four people surveyed support fundamental change or a rebuilding of the U.S. healthcare system. Those in favor of change were more likely to have experienced the difficulties of the current system, researchers found.

Confused About the New Insurance Exchanges? Watch This to Learn More »

Fundamental Changes Are Required

The American Medical Association devoted an entire issue of its flagship journal, JAMA, to spelling out the problems with U.S. healthcare.

Bioethicist Dr. Ezekiel Emanuel of the University of Pennsylvania said the U.S. healthcare system needs to drive down costs, eliminate unnecessary testing, and prevent those who are sick from getting sicker.

Half of those who use the U.S. healthcare system account for 2.7 percent of its costs, while 10 percent—those under the age of 65 with chronic illnesses—absorb nearly two-thirds of the spending.

Dr. Hamilton Moses of Johns Hopkins University said a major problem in determining if the costs associated with the U.S.’s fee-for-service are overpriced because costs are kept hidden.

“Chronic illness is where the misery is and where the money lies,” he said.

To combat this, Emanuel said, those with chronic conditions need VIP, “high-touch” care that focuses on the patient and keeping them out of the hospital.

“I do think we’re at the beginning of structural change,” he said. “It’s just the beginning.”

Learn Everything You Need to Know About Health Insurance »

Prioritize Care For the Elderly

Joanne Lynn, director of the Center for Elder Care and Advanced Illness, said that the healthcare system also needs to be redesigned around the fact that many Americans are living longer, especially since the children of the baby boomer generation enter their senior years.

These changes include customized service for people in their 90s, long-term care services, and geographically-centered care with a layer of monitoring and management to ensure seniors get the appropriate attention.

Feeding homebound seniors is a major aspect of homecare neglected by the healthcare industry, and with $38.7 million in cuts to the federal Meals On Wheels program, many seniors won’t get the nutrition they need, Lynn said.

“We’re the only country that has no national caregiver policy," she said. “Healthcare is designed by 50-year-old men in suits who are terrified of heart attacks.” 

When Lynn’s mother suffered from a collapsed vertebra, her insurance covered a $30,000 inflation surgery, but wouldn’t cover $5,000 for at-home care, which was the better option for her needs. This, Lynn said, highlights the problems plaguing our senior care system.

“We’re all going to be expensive people at some point,” she said. “Let’s find a way to make it less expensive.”

Read More: How to Talk to Seniors About Their Nutrition »